
Book -Ufe Ns^ 



STATE OF NEW YORK 



REPORT 



OF THE 



ATTORNEY GENERAL 



IN THE MATTER OF THE 



MILK INVESTIGATION 



TRANSMITTED TO THE LEGISLATURE APRIL 25, 1910 



ALBANY 

J B. LYON COMPANY, PRINTERS 

1910 



^':'^' 
\>^-^ 



JUN 18 '915 



State of New York 



Zli 



Xo. 45. 



IN SENATE 

April 25, 1910. 



Report of the Attorney-General in the Matter of the Milk 

Investigation. 



To the Legislature: 

In the. latter part of November, 1909, mj attention was called 
to certain facts and circumstances tending to show that a com- 
bination in restraint of trade and a monopoly in the milk traffic 
existed in the citv of ^N'ew York. This information consisted of 
statements made in the public press, a complaint made to this 
Department by a board of trade in the borough of Kings, J^ew 
York city, and the fact that the price of canned milk had been 
simultaneously advanced one cent a quart by all the dealers in 
Xew York city, on iN'ovember 1, 1909. If this information and 
charges were true, it was a serious matter and demanded prompt 
action. Milk being an article of common consumption among 
all the people in Greater 'New York, I deemed it my duty to im- 
mediately investigate these charges, with a view of ascertaining 
whether or not they were well founded. 

On the 6th day of December, 1909, in pursuance of article 22 
of the Consolidated General Business Law of the State, commonly 
known as the Anti-Monopoly Law, I made an application to the 
Supreme Court, in the county of New York, for the appointment 
of a referee to take the testimony of certain witnesses in reference 
to the existence of such a monopoly and combination in restraint 
of trade. 



4 [Senate 

Said act, among other things, provides: 

'' § 340. Contracts for monopoly illegal and void. Every 
contract, agreenient, arrangement or combination whereby a 
monopoly in the manufacture, production or sale in this state 
of any article or commodity of common use is or may be 
created, established or maintained, or whereby competition 
in this state in the supply or price of any such article or 
commodity is or may be restrained or prevented, or whereby 
for the purpose of creating, establishing or maintaining a 
monopoly within this state of the manufacture, production or 
sale of any such article or commodity, the free pursuit in this 
state of any lawful business, trade or occupation is or may be 
■ restricted or prevented, is herehy declared to be against pub- 
lic policy, illegal and void.^' 

EEMEDIES. 

Two remedies are given for the enforcement of the section 
above : 

1. By section 341 it is provided : 

'' Penalty. Every person or corporation, or any officer or 
agent thereof, who shall make or attempt to make or enter 
into any such contract, agreement, arrangement or combina- 
tion, or who within this state shall do any act pui'suant 
thereto, or in, toward or for the consummation thereof, 
wherever the same may have been made, is guilty of a mis- 
demeanor, and on conviction thereof shall, if a natural per- 
son, be punished by a fine not exceeding five thousand dollars, 
or by imprisonment for not longer than one year, or by both 
such fine and imprisonment ; and if a corporation, by a fine 
of not exceedino^ five thousand dollars. 

2. Section 342 provides: 

"Action to restrain and prevent. The attorney-general 
may bring an action in the name and in behalf of the people 
of the state against any person, trustee, director, manager or 
other officer or agent of a corporation, or against a corpora- 
tion, foreign or domestic, to restrain arid prevent the doing in 
this state of any act herein declared to be illegal, or any act 



A^o. 45.] 5 

in, toward or for the making or consummation of any con- 
tract, agreement, arrangement or combination herein pro- 
hibited, wherever the same may have been made.'' 

3. Section 343 provides: 

''Procedure; application for order. AYhenever the at- 
torney-general has determined to commence an action or pro- 
ceeding under this article, he may present to any justice of 
the supreme court, before beginning such action or proceed- 
ing, an application in writing, for an order directing the per- 
sons mentioned in the application to appear before a justice 
of the supreme court, or a referee designated in such order, 
and answer such questions as may be put to them or to any 
of them, and produce such papers, documents, and books, 
concerning any alleged illegal contract, arrangement, agree- 
ment or combination in violation of this article; and it shall 
be the duty of the justice of the supreme court, to whom such 
application for the order is made, to grant such application. 
The application for such order made by the attorney-general 
may simply show" upon his information and belief that the 
testimony of such person is material and necessary. The 
provisions of the code of civil procedure, chapter nine, title 
three, article one, relating to the application for an order for 
the examination of witnesses before the commencement of 
an action and the method of proceeding on such examinations, 
shall not apply except as herein prescribed. The order shall 
be granted by the justice of the supreme court to whom the 
application has been made, with such preliminary injunction 
or stay as may appear to such justice to be proper and ex- 
pedient, and shall specify the time Avhen and place w^here the 
witnesses are required to aj^pear, and such examination shall 
be held either in the city of Albany, or in the judicial dis- 
trict in which the witness resides, or in which the principal 
office within this state, of the corporation aifected, is located. 
The justice or referee may adjourn such examination from 
time to time and witnesses must attend accordingly. The 
testimony of each witness must be subscribed i>y him, and all 
must be filed in the office of the clerk of the county in which 
such order for examination is filed.'' 



6 [Senate 

In pursuance of the above provisions and upon my application, 
Mr. Justice Seabury appointed William Grant Brown referee to 
take the testimonj. I designated John B. Coleman, Esq., of 32 
:Nassau street, New York city, Special Deputy Attorney-General, 
to conduct the investigation. The order directed that the exami- 
nation of witnesses be held in the office of the Attorney-General, 
jS'o. 299 Broadway, borough of Manhattan, E"ew York city, or 
such other place in the city of Albany as the referee shall designate, 
and ordered that the directors, officers and managers of the Con- 
solidated Milk Exchange, a foreign corporation engaged in busi- 
ness in the State of New Y^ork, the officers, directors, managers and 
agents of the Borden Condensed Milk Company, a foreign corpora- 
tion engaged in business in the State of New Y^ork, and the of- 
ficers, managers, agents and directors of the iSheffield Earms, Slos- 
son-Decker Company, a domestic corporation engaged in business 
in the State of New Y'ork, and the officers, managers, agents and 
directors of thb Mutual Milk and Cream Company, a domestic 
corporation doing business in the State of New Y^ork, The Alex- 
ander Campbell Milk Company, to appear before said referee, at 
various dates mentioned in said order, and answer such questions 
as might be put to them, or any of them, and to produce such 
papers, documents and books, concerning such illegal contract, 
arrangement or combin'ation, as said referee should require, and 
further directed and ordered certain officers of the Consolidated 
Milk Exchange to produce upon such examination all minute 
books, books of record, papers or memoranda showing proceedings 
taken at the meetings of the board of directors and the stockholders 
of such company, from the time of its organization down to the 
present time, together with a copy of its by-laws, rules or regula- 
tions for the conduct of its business, and a list of its stockholders ; 
also its stock books, stock ledgers and stock certificate books, con- 
tracts, books, records and agreements and memoranda showing the 
prices fixed by said company for the purchase and sale of milk. 

Similar provisions of the order directed certain officers of the 
Borden Condensed Milk Company, the Mutual Milk and Cream 
Company and the Sheffield Earm's, Slosson-Decker Company, to 
produce similar I'ecords of hooks, papers, memoranda and proceed- 
ing of their companies respectively. 



^o. 45.] 7 

Certain officials of all the corporations heretofore named were 
examined upon the hearings before the referee. Mr. Marvin 
Scudder, an expert accountant, at mj direction, examined the 
books of the Borden, the Sheffield, the Mutual Milk Company and 
the Alexander Campbell Milk Company. 

Hearings were held in the city of Albany, where about twenty- 
eight milk producers testified, who were not named in the order of 
the court. Each one of these represented one of the large dairy 
counties of the State, as follows : Allegany, Broome, Delaware, 
St. Lawrence, Montgomery, Cattaraugus, Erie, Tioga, Herkimer, 
Chenango, Otsego, Franklin, Albany, Washington, Orange, Oswego, 
Jefferson and Oneida. 

It was thought wise to call the producers, to ascertain the 
prices that have been obtained for milk, covering a period of years 
back, the approximate cost to produce and market the milk, and in 
general to get all the information possible regarding the cost of 
production, transportation and distribution of milk in the city of 
l^ew York. 

During the investigation much valuable information was 
brought out or offered by persons having made a study of various 
phases of the question of pure milk, the amount of milk consumed 
annually in IN'ew York city, a comparison of the Borden and Con- 
solidated Milk Exchange prices, the price of fluid milk prevailing 
in various cities of the United States and Canada, statistical re- 
ports on the population of milk cows, etc., the milk supply of "New 
York city, with recommendations submitted to the miayor by the 
milk commission, country milk and dairy inspection by the de- 
partment of health, 'city of Xew York, pasteurization of milk, 
milk supply and control in Berlin, together with mii.ch valuable in- 
formation upon the subject of milk as a medium of infectious 
diseases, dealing with the general subject of handling milk from 
the standpoint of public health to the consumer. 

About 3,700' pages of testimony were taken in this investigation. 
The referee, with much pains and labor, has digested in a brief 
narrative form all of the testimony taken, covering these subjects, 
dowoi to 4:74: pages, in a separate volume, a copy of which I here- 
with submit with my report. It contains invaluable information 
to the producers, distributors and consumers of milk, and I most 



8 [Seistate 

earnestly recommend tliat the synopsis of the testimony and in- 
formation obtained npon these hearings, as reduced by the referee, 
be printed in a limited number of volumes, for distribution among 
those interested in the production and consumption of this article 
of common necessity. 

The hearings before the referee commenced on the 6th day of 
December, 1909, and continued until the 3d clay of March, 1910. 
I here desire to commend the very efficient services rendered the 
State by the Special Deputy Attorney-General, Mr. John B. Cole- 
man, and the referee, Mr. William Grant Brown. The testimony 
taken and information gathered disclosed the following facts: 

AS TO THE EXISTENCE OF AN AGKEEMEXT OE 
C0MBT:NATI0X to EIX the PEICE paid to THE 
PEODUCEE. 

In 1882, the Milk Exchange, limited, was organized under the 
laws of this State, ostensibly for the purpose of fixing a fair and 
equitable price to be paid for milk to the producers by the dealers 
doing business in Xew York city and vicinity. The producers 
were not given an equal representation with the dealers in the cor- 
poration, the result being that the producers with few exceptions 
became inactive in the proceedings of the Exchange. The Ex- 
change met each month and fixed the prices that the members of 
the Exchange would pay to the producers for milk and also did a 
small commission business in selling milk. 

In 1891, the Attorney-General brought an action to dissolve 
this corporation, on the ground that it was a combination to limit 
and lessen the supply of milk in the State of Xew York and to 
-^x and control the price thereof. 

This litigation resulted in a judgment being entered in the 
county of Broom. e. in 1895, dissolving the corporation and nullify- 
ing its charter on the grounds stated. 

About six months later, practically the same dealers and persons 
who composed the officers of the board of directors of the Milk Ex- 
change, limited, incorporated in the State of New Jersey, under 
the name of the Consolidated Milk Exchange. Four of the orig- 
inal incorporators of the Exchange were original incorporators of 
the Consolidated Milk Exchange and Alfred Ely was attorney for 



a 



]S^o. 45.] 9 

the Milk Exchange and appeared as con.n.sel for it in the action 
for dissolution. The principal office of the Consolidated Milk 
Exchange in Xew York city was the same as that of the former 
corj^oration, which was Ilv'o. 6 Harrison street. They met and 
voted to fix the price to be paid to the producers for milk in. the 
same manner as the board of directors of the old Milk Exchange 
did. The method adopted by the Consolidated Milk Exchange for 
fixing the j^rice of milk was as follows : 

Each director was a member of the "Committee on Values.'' 
After an informal discussion of what the price of milk ought to be 
for the succeeding month, a ballot was taken, and as a result of 
that ballot the price was fixed. A sample of the action of the 
Committee on Values/' as disclosed by the minutes of the board 
of directors, is as follows : 

"A recess was then ordered, subject to the call of the chair, and, 
on reassenibling, the chairman on values reported that, in the 
judgment of the committee, they found the value of milk to be 
per can of forty quarts, less freight charges from each respective 
shipping-point, together with an allowance of five cents per can 
for shortage. This report was duly accepted." 

The word " value " is used instead of the word " price " for the 
undoubted purpose of evading a violation of the law prohibiting 
the fixing of prices. Indeed a record of one of the meetings of this 
company shows that the word " price " was originally used, but 
was stricken out and the word " value " inserted. 

After the prices or values were fixed in this way, they were 
communicated to the Milk Eeporter, a newspaper published in 
I^ew Jersey. Upon the receipt thereof, the ]\Iilk Reporter sent 
out postal cards to its subscribers, comprising practically all of 
the members of the Consolidated Milk Exchange. These postals 
were of the following general form : 

'' OFFICE OF THE MILK REPORTER, 

"Sussex, N". J., ,19 . 

" Commencing October 1, , and until otherwise 

announced, the price of milk will be cents per quart, being 

an advance of of a cent per quart. 

" THE :\nLK REPORTER." 




10 [Senate 

Borden's Condensed Milk Company, the largest dealer in milk 
in the State, gave notice every six months to the producers what it 
would pay for milk during the ensuing six months. Borden's 
prices and those established by the Exchange were not always the 
same, but on the average were substantially the same. In the 
same way the Sheffield Farms, SOawson-Decker Company, the 
second largest dealer, sent out the prices it would pay to the pro- 
ducer. In soane cases the price was exactly the same as Borden's ; 
in other instances, the same as the Exchange, and in others a price 
which approximated Borden's and the Milk Exchange prices. 

The result was that a producer desiring to sell his milk in the 
!N'ew York market was compelled to sell either at Borden's or the 
Exchange prices, which were practically identical, and if not sat- 
isfied with either of these, he was compelled either to manufacture 
his milk into butter or cheese, or market it with unknown and 
oftentimes irresponsible dealers. On account of these conditions 
many farmers have stopped producing milk and there exist many 
abandoned dairy farms throughout the State. 

In my judgment these facts have demonstrated that there exists 
in I^ew York city a condition which in effect is a combination 
w^hich fixes the price at which the producer is obliged to sell milk 
and that he has no voice in determining what that price will be. 

THE PEICES PAID THE PKODUCERS WERE L^REA- 
SOISTABLE AND U^^PROEITABLE. 

The evidence further shows that the average price paid by the 
Exchange and Borden's to the producer for the years 1908 and 
1909 was from 3% to 3^/2 cents a quart. The average cost of 
production during the same period, as testified to by the producers, 
was 3.51'3 cents a quart. They were unanimous in agreeing that 
they were selling milk for about what it cost to produce. 

The figures as to cost of production given by the producers are 
substantially the same as those given by the witnesses called who 
were dealers and also producers, all agreeing that it costs from 3 
to 4 cents to produce a quart of milk. The result is that the busi- 
ness of producing milk is not a profitable one for the metropolitan 
market. The producer has no voice in making the price at which 
he may sell his milk. In other words, if he sells his milk in the 



Xo. 45.] 11 

Xew York market, it must be at the price iixed by the '* Value 
Committee " of the Consolidated Milk Exchange or the price at 
which Borden's will buy milk for each six months. If there 
is no creamery or cheese factory close to the producer, he has no 
alternative but to accept the prices above named, unless he takes 
his chance of sending milk to an unknown and oftentimesi irre- 
sponsible dealer, which in many cases means the entire loss of his 
shipment. 

COST OF MILL FEED A CHIEF FACTOR llSl THE COST 
OF THE PEODUCTIOX OF MILK. 

The testimony shows that, for at least eleven years last past, it 
took 1.7 pounds of mill feed throughout the year to produce a 
quart of milk, and that mill feed cost, on an average, for the same 
period 1.4 cents a pound. That is, the average cost of mill feed, 
during this period, employed in the production of milk, was 
slightly over 42 per cent, of the selling price of milk during that 
period, milk during that period having averaged 2.99 cents per 
quart. Mill feed has been greaflj^ advancing in price for the last 
twenty years, until the present price of about $3 per ton is about 
double what it cost twenty years ago. 

AS TO A COMBINATIOJSr TO FIX THE PEICE TO THE 

COXSUMEE. 

On Xovember 1, 1909, practically all the dealers in bottled milk 
in the city of Xew York raised the price to consumers from 8 to 9 
cents a quart. Much testimony was introduced showing that the 
dealers had for a month or two previous to Xovember, 1909, con- 
sulted together as they met from time to time in reference to what 
they termed the " advisability and necessity for raising the price 
of milk." They deny that any specific agreement was entered 
into, but some dealers admitted that they had urged their asso- 
ciates to raise the price of milk to that amount at that time. 

In connection with the raising of the price of milk to consumers 
the testimony developed the fact that an organization known as 
the Milk Dealers' Protective Association was organized under the 
Membership Corporation Law of the State of Xew York in the 
month of October, 1895, at the time the Consolidated Milk Ex- 



/ 



12 [Senate 

change was organized in ^ew Jersey. This Milk Dealers' Pro- 
tective Association, while organized ostensibly as a club, com- 
prised in its membership a large number of the dealers in the 
city of N^ew York. The evidence tended to show that these dealers 
did sell milk to stores and consumers in the city of ^ew York at a 
uniform price, generally 38 cents a can above the Exchange price. 
The purpose of this organization was to discourage independent 
action by dealers by drastic action and methods. 

The evidence showed that all the members of the Milk Dealers' 
Protective Association endeavored to maintain this price, and if an 
independent dealer, not a member of the Association, attempted 
to sell milk at a lower price than that established by the Associa- 
tion, what was known as the ^^ dead " wagon was started after him. 
The peculiar duty of this " dead " wagon was to go around to the 
customers of the independent dealer and to offer them milk at a 
lower price than the independent was selling at. This '^ dead '' 
wagon was maintained and supported by the Milk Dealers' Pro- 
tective Association. If the operations of the '' dead " wagon wore 
not successful in putting an independent dealer out of business, an 
attempt was usually made to cut off his supply of milk by coer- 
cion, threats or influence exerted upon the party who was supply- 
ing the independent with milk, sometimes as high as $1,500 being 
offered to the party supplying the independent with milk if he 
would break his contract with the independent or send the inde- 
pendent sour milk for a few days. 

This particular feature of the testimony was called to the atten- 
tion of the district attorney of 'New York county by Mr. Coleman, 
my deputy, with the request that this branch of the case be pre- 
sented to the grand jury, which was done. 

The above testimony warrants the conclusion, almost to a moral 
certainty, that an agreement was made and an understanding had 
in some way that the price of milk should be raised on or about 
the 1st of IsTovember. In view of the fact that the officers of each 
corporation and the individual milk dealers deny the existence of 
any such agreement, it leaves the State without any legal evidence 
that such an agreement existed, other than the presumption that 
would follow from the simultaneous raise of the price by nearly 
all the dealers from 8 to 9 cents. 



]Sro. 45.] 13 

I believe the evidence in tlie case would warrant the 'bringing 
of an action against the Consolidated Milk Exchange for the can- 
cellation of its certificate to do business in this State, and for an 
injunction restraining it from further acts within this State in 
.fixing the price of milk, as indicated by the action of its '' Com- 
mittee on Values." 

S'hortly after the hearings began in this investigation and many 
of the facts regarding the operation of the Consolidated Milk Ex- 
change and its manner of fixing prices had been developed, the 
officers of the company made an application to the Secretary of 
State for the cancellation of its license and to voluntarily be per- 
mitted to withdraw from the State. This action upon their part 
of course withdrew the corporation from the jurisdiction of the 
courts of this State. 

However, some of the constituent or integral parts of the Con- 
solidated Milk Exchange, viz., certain stockholders, directors and 
officers, are within this jurisdiction, and they are, in many in- 
stances, dominant factors in corporations dealing in inilk in this 
State. The price established by the Consolidated Milk Exchange 
is utilized by these directors in their respective corporations in 
purchasing milk. These directors, at meetings of the Consolidated 
Milk Exchange held in ^NTew Jersey, pass resolutions that become 
elfective in this State, and it may be feasible to start proper pro- 
ceedings to prevent these individuals from participating in any 
act which ultimately tends to the creation of a monopoly in a com- 
mon necessity of life. 

PEICES REDUCED. 

One of the most important results accomplished was the reduc- 
tion of the price of milk from nine cents to the old rate of eight 
cents. This was undoubtedly brought about by the severe criticism 
visited upon the dealers in milk, the general agitation produced by 
the investigation, and more particularly the development of facts 
showing that the raise in price was not warranted. 

During the hearings a copy of all the evidence taken was fur- 
nished to the district attorney of !N^ew York county. Upon such 
evidence a special grand JMVj summoned on Eebriiary 28, 1910, 



14: [Senate 

* 

found individual and blanket indictments against eight members 

of the board of directors of the Consolidated Milk Exchange for- 

violating the provisions of the Anti-Monopoly Act. 

WAS THE RAISE OF THE PEICE OF BOTTLED MILK ■ 
FROM EIOHT TO ISHNE CEJ^TS JUSTIFIED? 

An attempt was made by the dealers to justify this unanimous 
action on their part upon the ground that the additional cost of 
milk made it necessary. While it is true that the dealers began 
to pay a little more for milk in the last two months of 1909, the 
average price paid for that year was slightly less than paid during 
the previous year to the producers. The increase to the producer 
was only one^fourth of a cent, while the remaining three-fourths 
of a cent increase was retained by the dealers. 

Furthermore, an eixamination of the books of some of the largest 
dealers revealed the fact that enormous profits were being made by 
the milk dealers. According to the information gathered by Mr. 
Scudder, the expert accountant, one company showed net profits 
on fluid milk alone, sold in 'New York and Chicago for the nine 
months ending September 30, 1909, of $779,407.92, and foi^the 
corresponding nine months during the year 1908, of $439,0*54.80, 
showing that during the same period in 1909 the net profits on 
fluid milk alone, in IsTew York and Chicago, increased $340,353.12 
over the preceding year. This company's total net profits for the 
year ending September 30, 1909, were $2,617,029.40. The total 
capital stock of this company, issued and outstanding during that 
year, was $2'5,0'00,0'00, of which $15,428,406. 46 was isisued for 
trade-marks, patents and good will. This company during the 
ten years of its existence paid nearly every year a dividend of 6 per 
cent, on its common stock and during that time has succeeded in 
rolling up a surplus of $8,824,230.59 in addition thereto. This 
same company showed net profits, after all charges and expenses of 
every kind and nature had been deducted, on fluid milk and cream 
in New York alone, for the year ending June 30, 1909, ( f $682,- 
367.16, and this was on an investment, as shown by their tax 
statement filed by them in the ofiice of the Coinptr oiler of the State 
of New York, of $4,890,487, which was employed in the fluid milk 
and cream business in the city of ITew York. This would show 



l^o, 45.] 15 

a net return to this company on this branch of its business of about 
14 per cent, during the year ending June 30, 1909, whereas dur- 
ing the year ending June 30, 1908, the net profits of this same 
company on this same branch of its business amounted to $512,- 
243.89 ; the year ending June 30, 1909, shomng an increase over 
the previous year of something over $170,000. 

Another company, which was incorporated about eight years 
ago, for the sum of $500,000 of which $200,000 was issued for 
tangible assets and $300,000 for good will, showed that the net 
earnings for the year ending February 28, 1909, after deducting 
all charges and expenses of every kind and nature, Avere $221,- 
694.63, and further showed that the net earnings for the eight 
months ending October 31, 1909, after deducting all charges and 
expenses of every kind and nature, were $257,923.47, w^hich is 
over 120 per cent, on the amount originally invested in this com- 
pany eight years ago. In the meantime, this same company has 
paid on its capital stock over 12 per cent, dividends each year, the 
dividends for the year ending December 31, 1909, being 22 per 
cent, and it has in addition rolled up a surplus of $962,627.02. 

These are only two of the instances which show that the raise 
in price from 8 to 9 cents a quart for bottled milk to the consumers 
about IN'ovember 1, 1909, w^as not justified, either by the increase 
in price paid to the producer for milk or by the increased cost 
in handling, the evidence showing that the enormous profits rea- 
lized in the year 1908 were greatly exceeded by those realized in 
the year 1909, the year in which the price to the consumer was 
raised. 

It is only fair to say that the small dealers made no such profits, 
for the reasons, first, that it costs more to handle milk per quart 
in small quantities than in large, and the aggregate profits on 
small sales are, of course, limited. 

CAPACITY OF MILK BOTTLES. 

During the investigation it was charged that some dealers were 
selling milk in bottles represented as containing a quart of milk, 
w^hen in fact they contained considerably less. This is a matter 
that should also receive attention from the Legislature. Leii'isla- 
tion should be enacted requiring all bottles used for holding milk 



16 [Senate 

sold in this State to be plainly stamped in marks blown into the 
glass with the number of quarts or pints that each bottle holds, 
together with the name of the maker of such bottle. It should be 
further made a misdemeanor for any maker of such bottle to so 
stamp a false measure on the bottle and a misdemeanor for any 
dealer to sell milk in bottles not so stamped or falsely stamped. 

EEMEDIES. 

Milk is one of the necessaries of life. Any condition or circum- 
stances, the result of an agreement or otherwise, which lessens the 
supply or raises the price of milk or which tends to place beyond 
the reach of the poor an adequate supply of pure and wholesome 
milk, creates an intolerable condition, for which a remedy must be 
found. 

The several States have enacted what are commonly called 
anti-monopoly laws. The purpose of these laws is to restrain mo- 
nopoly and prevent an interference with competition. To a great 
extent these statutes have not brought the relief hoped for. Manu- 
facturers and middlemen have learned the great advantages that 
come from agreements or unxlerstandings which eliminate competi- 
tion. 

These understandings need not be in writing or formally made. 
They may be in the form of what is known as' an understanding 
or a ^^ gentlemen's agreement." It is practically impossible to 
frame a law, no matter how stringent, which will reach the so- 
called ^^ gentlemen's agreement." 

Dealers in a certain article have only to discuss the conditions 
of their business at the club or at noonday lunch. They learn 
from each other what the judgment of the majority is as to prices. 
They know that a formal agreement is in restraint of trade and 
in violation of the average anti-monopoly law. The prices fixed 
are called their judgment of values, and as a result they can take 
the stand and testify that there was no agreement between them 
upon the subject of valuation or price. Such action is just as ef- 
fective as a formal agreement would be. It accomplishes the same 
purpose, and at the same time enables them to satisfy their con- 
sciences by swearing that there was no formal or other kind of an 
agreement made. The laws enacted for the purpose of restrain- 



:N^. 45.] ^ 17 

ing monopoly and fostering competition should be continued, but 
it is self-evident that the almost insurmountable obstacle to over- 
come is the obtaining of legal evidence of the existence of the 
^' gentlemen's agreement." Because of this, it is necessary, espe- 
cially in the case of a necessity of life, for the State to go further 
and undertake to regulate the prices which middlemen and 
dealers may charge for and profits they may make from dealing in 
articles of common necessity such as milk. 

In the case of combinations to fix the price of certain commodi- 
ties, such as steel rails, etc., railroad companies and large con- 
sumers are in a position to fight such combinations. Large, single, 
individual consumers of any product may, before submitting to 
extortion, proceed to manufacture the product themselves, but the 
individual consumer of milk cannot buy or rent a dairy farm. 
They are so scattered that it is impossible for them to combine in 
purchasing what might be called a co-operative dairy. The plain 
duty of the State, acting for the people, is to regulate the milk 
traffic so that the consumer and producer will not be at the mercy 
of the middleman. The highest duty which the State has to per- 
form is to protect the public from imposition and wrongdoing. 
Public service corporations may be limited in the rates they 
charge. The price of gas and grain elevator charges have been 
fixed by law. The reason for this is to protect the public from ex- 
tortion. Public sendee corporations enjoy special franchises from 
the State which may become a monopoly, but, as Ave have seen, a 
monopoly can be created as effectually through a ^' gentlemen's 
agreement " as by the granting of a special franchise. This being 
so, govennental regulation would seem the only remedy to protect 
the people from this sort of monopoly. The State might regulate 
the maximum prices for milk which can be sold to the consumer, 
see that an adequate supply of milk is available for the State's in- 
habitants, and that reasonable prices are paid to the producer for 
milk. 

By legislative enactment, it might be declared that certain ar- 
ticles, such as milk, flour, coal, ice and meat, are articles of com- 
mon necessity. A commission could be provided for, to be ap- 
pointed by the Governor, the members of which, if practicable, 
to be suggested by members of boards of trades in cities and the 



18 [Senate 

State Grange. No member of sucli commission should be per- 
mitted to be engaged or interested in the business of trafficking or 
dealing in the articles enumerated as common necessities. The 
act should further provide that any corporation intending to deal 
or traffic in these common necessities of life should procure a li- 
cense to carry on such business. The co^mmission should be given 
plenary power to inquire into all the affairs of those engaged in 
the business, with power of subpoena, and be vested with the right 
to obtain full information upon all subjects pertaining to the busi- 
ness, so as to enable the commission to perform its duties. This 
commission should have the power to fix the prices or profits which 
may be charged or made, over and above the price paid to the pro- 
ducer, with the power to regulate the producer's price also. If 
the dealer is confined to a certain profit, the incentive to fix an 
unreasonable price upon the producer is largely, if not wholly, re- 
moved. 

Effective organization or community of effort can produce and 
distribute any article of common necessity cheaper than the indi- 
vidual. Therefore, organization, in and of itself, by reason of the 
fact of the cheapening of articles of common consumption, is not 
the primary evil, but it is the abuses of organization, such as 
raising prices after competition has been stifled, with which the 
State must deal. 

^ The old legal maxim, ^' there is no wrong without a remedy,'' is 
f-till in force. Concededly this investigation discloses that a posi- 
tive wrong exists, and the paramount duty for the State is to find 
a remedy for that wrong. 

The congestion of population in our cities has given rise to new 
conditions in our industrial and economic life. Articles of com- 
mon consumption, such as milk, flour, coal, ice and meat, that 
formerly, under the law of supply and demand, reached the con- 
sumer at a fair price, have become the subject of monopoly, 
through organization and combination between middlemen. Deal- 
ing in these articles of common necessity might be regulated by 
the government if such regulation shall be found to be im- 
practicable, it will furnish a new and powerful argument for 
municipal ownership, and municipalities will ask for legislative 
authority to undertake the distribution of these common necessi- 



1^0. 45.] 19 

ties of life among their citizens. It will not do to argue that there 
is no remedy. Such a contention would be a co^nfession that our 
form of government is a failure, and the people in these great 
centers of population will become the victims of the greedy and 
rapacious, who are able under present conditions to prey upon the 
producer and consumer with impunity. 

All of which is respectfully submitted, 

EDWARD R. O'MALLEY, 

Attorney- General. 

Dated, Albany, X. Y., April 25, 1910. . 



SUPREME COURT OF NEW YORK 
COUNTY OF NEW YORK. 



In the Matter 



OF 



The'Tetition of Edward R. O'Malley, 
Attorney-General of the State of New 
York, for an order directing Charles ^ 
H. C. Beakes and others to appear be- 
fore a Referee for examination, pur- 
suant to Article 22 of Chapter 20 of 
the'' Consolidated Laws of the State 
of New York, known as the General 
Business Law. 



Synopsis of Testimony Taken Before William Grant Brown, 
Referee, and a Digest of Information Obtained by the 
Referee from Official Scientific Reports from Various 
Countries, Letters and Suggestions from Practical and 
Scientific Men. 



Referee appointed on the 6th day of December, 1909, b}' Hon. 
Samuel Seabury, Justice of the Supreme Court of the State of New^ 
York. 



[Senate, Xo. 45.] 23 



Supreme Court of New York — 
County of New York. 



In the Matter 



of 



The Petition of Edward R. O'Malley, 
Attorney-General of the State of New 
York, for an order directing Charles )- 
H. C. Beakes and others to appear be- 
fore a Referee for examination, pur- 
suant to Article 22 of Chapter 20 of 
the Consolidated Laws of the State 
of New York, known as the General 
Business Law. 



Synopsis of Testimony Taken Before William Grant Brown, 
Referee, and a Digest of Information Obtained by the 
Referee from Official Scientific Reports from Various 
Countries, Letters and Suggestions from Practical and 
Scientific Men. 

The Milk Exchange, Limited, will be referred to as the " Ex- 
change Limited," and the Consolidated Milk Exchange, Limited, 
will be referred to as " The Consolidated. '^ 

The " Exchange Limited " was organized on the 21st day of 
October, 1882, under chapter 611 of the Laws of 1875, entitled 
*'An act to provide for the organization and regulation of certain 
business corporations," with a capital stock of ten thousand dollars 
($10,000), with the following named gentlemen as incorporators or 
original subscribers to the capital stock: 

George Slaughter, John W. Tayntor, George Conklin, Charles H. 
C. Beakes, Robert F. Stevens, Thomas 0. Smith, R. R. Tone, 
W. A. Wright, P. E. Sanford, J. D. Miller, Joseph Laemmle, G. 0. 
Omsted, T. J. Tuthill and Jesse Durland. 

The purpose of the corporation, as expressed in the charter, was: 

'' The object and nature of the business for which said corpora- 



'24 [Senate 

tion is to be formed is the buying and selling of milk at wholesale 
and retail, the purchase of dairies of milk when deemed advisable 
and the sale of same to milk dealers." 
The charter also provided as follows: 

" The number of shares of which said capital stock shall consist 
to be four hundred shares of twenty-five dollars each issued subject 
to the requirements of the By-laws." 

On or about the 16th day of January, 1891, an action was com- 
menced by the Attorney-General of the State of New York, Hon. 
Charles F. Tabor, in the name of the People of the State of New 
York against the '' Exchange Limited," and the relief sought was: 
First, nonuser; second, an unlawful and illegal combination and 
conspiracy made in restraint of trade to limit the supply of milk 
and to fix and control the price thereof in the city of New York 
and elsewhere, and on or about the 1st day of May, 1895, the 
^' Exchange Limited " was dissolved by a decree of the Supreme 
Court made and entered in the office of the Clerk of the county of 
Broome, State of New York. 

In the opinion written by Judge Haight for the Court of Appeals 
the statement of facts as they appeared in the case is as follows: 

" It appears that the Milk Exchange when organized, or shortly 
thereafter, had ninety odd stockholders, a large majority of whom 
were milk dealers in the city of New York or creamery or milk 
commission men doing business in that vicinity; that at the first 
meeting of the exchange after its incorporation, the following, 
amojig other by-laws, was adopted : ' The board of directors -shall 
have the power to make and fix the standard or market price at 
which milk shall be purchased by the stockholders of this company 
and to declare the stock of any and every stockholder herein who 
purchases milk at any other than the price so named by the board, 
forfeited, subject to the conditions set forth in article 3, sections 4 
and 5, of these by-laws. All stock so forfeited by said board of 
directors shall be subject to the order of the board of directors and 
shall be disposed of they direct.' This by-law remained in force 
for a number of years and until after there was an investigation 
as to the character and nature of the defendant's business and a 
report made by a committee of the Senate. The by-law was then 
amended by striking out that part thereof which authorized the 
forfeiture of the stock of a stockholder who purchased milk at 
another price than that fixed by the Exchange. It was again 
amended in April, 1890, but that part thereof which provided that 
the board of directors shall have the power to determine and fix 



]S!o. 45.] 25 

from time to time the Exchange price of milk was retained. Acting 
upon these by-laws the defendant's board of directors have from 
time to time during its corporate existence fixed the price of milk 
to be paid by dealers, and the prices so fixed have largely con- 
trolled the market in and about the city of New York and of the 
milk-producing territory contiguous thereto. 

''These facts are significant, and we are unable to escape the con- 
viction that there was a combination on the part of the milk 
dealers and creamery men in and about the city of New York to 
fix and control the price that they should pay for milk. Was this 
lawful?'' 

145 N. Y. 269. 

" The Consolidated " was organized under the Corporation Laws 
of the State of New Jersey on or about the 15th day of November, 
1895, with a capital stock of twenty-five thousand dollars ($25,000), 
with the following named gentlemen as incorporators: 

John A. McBride, J. E. Wells, Thomas B. Harbison, Charles 
H. C. Beakes, William C. A. Witt, M. L. Sanford, J. V. Jordon, 
Fred H. Beach, John P. Wierck, George A. Slaughter and William 
A. Wright. 

The names and places of residence of the stockholders and num- 
ber of shares held by each, as appear in said original articles of 
incorporation of " The Consolidated," are as follows: 

Frederick H. Beach.. . . Dover, N. J 1 share. 

Daniel Bailey Glenwood, N. J 5 shares. 

John A. McBride Quarryville, N. J 5 shares. 

Charles H. C. Beakes . . Orr's Mills, N. Y 5 shares. 

Thomas H. Harbison . . Philadelphia, Pa 5 shares. 

I. C. Jordan Middletown, N. Y 5 shares. 

Joseph Laemmle New York city 5 shares. 

Joseph V. Jordan Newburgh, N. Y 5 shares. 

George Slaughter Campbell Hall, N. Y 5 shares. 

Milton L. Sanford Warwick, N. Y 5 shares. 

W. C. A. Witt New York city • 5 shares. 

James E. Wells Chester, N. Y 5 shares. 

William A. Wright .... Brooklyn, N. Y 5 shares. 

George Roe Augusta, N. J 5 shares. 

John P. Wierk Brooklyn, N. Y 5 shares. 

Thomas 0. Smith New York city 4 shares. 



26 [Sen" ATE 

Articles '' Second " and '' Sixth "of the charter of '' The Con- 
sohdated " are as follows: 

'' Second. That the places in this State where the business of 
such company is to be conducted are Jersey City and such places 
in the counties of Sussex, Morris, Essex and counties adjacent 
thereto, as the business of the company may warrant. The prin- 
cipal part of the business of said corporation within this State is 
to be transacted at Jersey City, and the places out of this State 
where the same is to be conducted and where the corporation 
proposes to carry on operations are the cities of New York and 
Brooklyn, and such other places in the State of New York and 
other States of the United States or foreign countries as may from 
time to time be advisable. And that the objects for which this 
corporation is formed are: To foster and promote trade and com- 
merce in dairy products; to deal in milk and dairy products when- 
ever it can be done advantageously; to act as a commission merchant 
for the sale of milk and other dairy products, and also as agent for 
farmers, producers and shippers for the sale of their dairy products 
at any time and from time to time whenever such business can be 
done; to collect and 'diffuse accurate and reliable information 
among its stockholders and members as to the standing of mer- 
chants, producers, dealers, consumers and others engaged in any 
way in purchasing or selling milk, cream or other dairy products 
or as to any and all other matters of importance or interest to its 
members and the trade; to collect and preserve for the benefit of 
its stockholders, members and others, statistics and other informa- 
tion in regard to any matters connected with or relating to the trade 
in milk and dairy products, to promote uniformity and certainty 
in the customs and usages of the trade and a more enlarged and 
friendly intercourse between producers, merchants and business 
men engaged or in any way interested in dairy products." 

'' Sixth. Annual payments or dues may be required of each 
member of the corporation at such times and to such amounts as 
the By-laws may from time to time provide, and no certificate 
of the capital stock and no shares of the capital stock of this cor- 
poration shall be transferable or be transferred so long as the 
holder or holders thereof shall be in default in the payment of any 
annual dues or otherwise indebted to the corporation. No person 
to whom stock shall be transferred shall be entitled to vote at any 
meeting or to any of the rights and privileges or a member of the 
corporation until he has been duly elected a member thereof by 
the Board of Directors, or in such manner as the By-laws may 
provide. 



IS^O. 45.] 27 

'^ Certificates of stock shall be issued only for par, and only upon 
the receipt by the treasurer of the full amount of their par value 
thereof in cash or property purchased as provided by law, and no 
subscriber to the capital stock or stockholder or member of the 
corporation shall be entitled to vote at any election or meeting of 
the corporation upon any shares upon which any installment or 
assessment called for by the Board is and has been unpaid for 
thirty days preceding such election or meeting. No member or 
stockholder who is in default in the payment of any annual dues 
as provided for in the By-laws, shall be entitled to vote at any 
election or meeting of the corporation. 

'' Upon each subscription to the capital stock, at least ten per cent. 
of the par value thereof shall be paid in cash by the subscriber at 
the time of making the same; the remainder shall be paid at such 
time or times and in such installments as shall be fixed b}' the 
Board of Directors within the limits prescribed by law. If default 
shall be made by any member or subscriber to the capital stock, 
in the payment of any installment or assessment upon any share 
or shares of stock when called for by the Board of Directors, the 
Board of Directors, in addition to the remedies provided for such 
case by the laws, may at its option take proceedings in the name of 
the corporation by action at law against any subscriber or person 
so in default, to recover the amount of any installment or assess- 
ment remaining unpaid after the expiration of thirty days from 
the date fixed for such payment, or may declare the stock and all 
previous payments thereon forfeited after the expiration of sixty 
days from the service on the defaulting stockholder personally, or 
by mail directed to him at his post-ofhce address as given by him 
at the time of making his subscription to the capital stock, of a 
written notice requiring him to make payment w^ithin thirty days 
from the service of such notice, at the office of the company, or at 
a place or to a person named in said notice, and stating that in 
case of failure to do so, his stock and all previous payments thereon 
will be forfeited for the use of the corporation." 

The list of the members of " The Consolidated " on January 14, 
1909, is as follows: 

NAME. Address. Shares. 

C. H. C. Beakes 206 East 12th st., New York 61 

I. C. Jordon Middletown, N. Y 59 

Edward B. Sanford. . . . Warwick, N. Y 50 

Wm. A. Wright 69 Leffert's place, Brooklyn 30 

Joseph V. Jordan Newburgh, N. Y 30 



'28 [Senate 

NAME. Address. Shares. 

Sandford Dairy Co ... . 138 West 31st st., New York 26 

John P. Wierck 502 Broadway, Brooklyn 25 

Walter R. Comfort 32-34 New Chambers st., N. Y. . . 25 

Thomas 0. Smith 872 Sixth ave., New York 24 

Joseph Laemmle 202 Bleecker st., New York 23 

George Ihnken 194 19th st., Brooklyn 20 

Fred E. Seller 272 Plane st., Newark, N. J 16 

Alexander Campbell. . . 802 Fulton st., Brooklyn 15 

Wm. A. Lawrence Chester, N. Y 15 

Chas. E. Seller 272 Plane st., Newark, N. J 14 

I. Windsor Farist Bridgeport, Conn 12 J 

John A. McBride Sussex, N. J 12 

H. F. Hunteman 611-613 East 12th st., New York. 12 

W. B. Conkhn 146 West 25th st.. New York 10 

Dennis Reardon 59 Montgomery st., Jersey City. . ,10 

W. H. Bennett Goshen, N. Y 10 

E. D. Pierson Little Britain, N. Y 10 

H. M. Schloss 1759 Richmond terrace. West 

New Brighton, S.I 10 

James A. Howell 144-154 Provost st., Jersey City. . 10 

W. A. Wells . Goshen, N. Y ■' .\ . . .^ . . 74 

F. H. Herkstroter 83 Cumberland st., Brooklyn 7-i 

James C. Rider Central Valley, N. Y 6 

R. B. Baker 591 Second ave.. New York 6 

Daniel Bailey Glenwood, N. J 5 

Richard Bull Campbell Hall, N. Y 5 

W. H. Bennett 20-22 Bridge st., Newark, N. J. . . 5 

David Bleier 520 East 72d st.. New York 5 

H. S. Chardavoyne .... 406 Court st., New York 5 

Alfred Ely, attorney. . . 31 Nassau st.. New York 5 

Thomas B. Harbison. . 2015 Dreer st., Phila., Pa 5 

Kate Shea 855 West End ave.. New York . . 5 

C. Ebenezer Johnson . . Goshen, N. Y 5 

Christ Jetter 78 Perry st.. New York 5 

Monroe Dairy Co 802 Fulton st., Brooklyn 5 

D. D. Munson Frankhn, N. J : 5 

N. H. Margarum Stockholm, N. J 5 

Wm. E. Rogers Carlton ave. & Pacific st., Bklyn . . 5 

Wm. E. Rogers & Co . . Carlton ave. & Pacific st., Bklyn. . 5 

Henry Ranch 21-27 Garden st., Brooklyn 5 

John Jetter 439 Hudson st., New York 5 



Xo. 45.] 29 

NAME. Address. Shares. 

Webb Harrison Middletown, N. Y 5 

W. H. Strong Goshen, N. Y • . . . . 5 

Geo. Slaughter Third ave. and Bergen st., Bklyn . . 5 

John H. Stellmann . . . . 123 Frankhn ave., Brooklyn 5 

R. H. Taylor 202 Fifth ave., Brooklyn 5 

Christ Vagts 405a McDonough st., Brooklyn. . . 5 

W. Weber 139 West 96th st.. New York .... 5 

Henry Youngs Goshen, X. Y 5 

F. B. Sanford, attorney 141 Broadway, New York 5 

Stephen I. Webb Campbell Hall, N. Y 5 

Reid Ice Cream Co 858 Fulton st., Brooklyn, N. Y . . . 24 

Dairymen's Mfg. Co . . . Warren Bay & Morgan sts., Jersey 

City../ \ 2 

L. L. Campbell & Bro . . 534-536 West 48th st., New York 2 

Standard Butter Co . . . Oswego, N. Y. U 

Frederick H. Beach.. . . Morristown, N. J 1 

B. Howell Goshen, N. Y 1 

Herman Kern 907 Avenue D, Bayonne, N. J . . . . 1 

E. A. Decker Sussex, N. J 4 

M. L. Sanford Warwick, N. Y 17^ 

Geo. E. Beakes Middletown, N. Y 5 

E. J. Preston Amenia, N, Y 5 

H. A. Robinson 44 Boerum pi., Brooklyn, N. Y. . . 5 

Newman Hall Sussex, N. J 2 

Samuel Levy 47 Forsyth st., Brooklyn, N. Y. . . 2 

The N. J. Zinc Co Frankhn, N.J 2 

Anton Koster 860 Tenth ave., New York 

J. R. Stoll Newton, N. J 

C. A. Wilson Sussex, N. J 

James Roof Newton, N. J 

Peter M. Roof Halsey, N.J 

G. V. Armstrong Papakating, N. J 

A. Talman Ogdensburg, N. J 

R. V. Armstrong Papakating, N. J 4 

John Keogh 13 Catharine st.. New York 4 

Hove}', Clarke & Co. . . Bainbridge, N. Y -l 

The following gentlemen were incorporators of the " Exchange 
Limited" and incorporators or members of ''The Consolidated:" 

George Slaughter, Charles H. C. Beakes, Thomas O. Smith, 
W. A. Wright and Joseph Laemmle. 

Alfred Ely was attorney for both corporations. 



30 [Senate 

FARMERS. 

NAME. Quarts produced. ^fo%?odSS.'' 

one 3, ear. ^^^^ 

Harry Vail 44,000 3.4 

Andrew J. Nicoll 80,000 3.00 

William H. Strong 95,000 3.25 

Henry Stephen 

John Pettys 35,000 

James C. Ryder 

Isaac C. Blandy 

Almon R. Eastman *. 

William A. Mather 

Oscar Hale 

George H. Greaves 58,400 

Edward K. Parkinson 

6,000 lbs. 

6,220 lbs. 

7,000 lbs. 

7,500 lbs. 

8,000 lbs. 

9,000 lbs. 

Average 

Milton Sanford 

Edward J. Brown 47, 152 

Delos Axtell 

Isaac Magoon 38,950 

Henry*Young 

Rufiis Wikoff 63,763 

Albert J. Moe 

WiUiam A. Wells 

William P. Richardson. 

WiUiam C. Bennett 146,000 

Benjamin F. Livingston 

Stuart S. Comfort 50,383 

Benton Howell 

Charles F. Multon 90,000 

Will E. Kay 83,618 

H. LaMott Locke 

Herbert E. Cooke 180,000 

George M. Brown 

Charles Johnson 116,800 

Frank Bander 136,000 

Average price per quart 3 . 513 



3 


.50 


4 


.25 


4 


.00 


3 


.00 


3 


.00 


4 


.79 


5 


.28 


4 


.79 


4 


.53 


4 


.22 


3 


.96 


. 3 


50 


4 


38 


2 


75 


3 


50 


3 


00 


4 


00 


3 


20 


4. 


00 


4. 


00 


3. 


50 


3. 


00 


3. 


20 


3. 


50 


3. 


25 


4. 


00 


3. 


33 


3. 


00 



l>lo. 45.] 



31 



Farm year April 1 to March 31. 



Total cans of 
40 quarts. 



40 quarts. 



Statement of Milk Delivered in New York City During the 
Farm Years (Including Cream and Condensed Milk) in 
Cans of Forty Quarts Each. 

Compiled from monthly reports b}^ the railroad companies b}^ 

Alfred Ely. 

Average price 
Dailv avprflffp P^^ quart to 
rLc nf farmers based 

cans 01 ^ppj^ Exchange 

values. 

Cents. 

.0253 
.0230 
.0234 
.0240 
.0262 
.0271 
.0273 
.0294 
.0278 
.0283 
.0289 
.0305 
.0341 
.0327 



1895-1896 8,117 

1896-1897 8,317 

1897-1898 8,807 

1898-1899 9,235 

1899-1900 9,593 

1900-1901 9,865 

1901-1902 10,344 

1902-1903 10,827 

1903-1904 11,613 

1904-1905 12,315 

1905-1906 13,391 

1906-1907 14,719 

1907-1908 15,175 

1908-1909 15,303 

1909-1910 



372 
842 
565 
596 
007 
974 
175 
326 
859 
642 
891 
940 
888 
208 



22 


237 


22 


728 


24 


102 


25 


303 


26 


210 


27 


031 


28 


340 


29 


664 


31 


732 


33 


741 


36 


590 


40 


328 


41 


463 


41 


,926 



DEALERS. 

Cost of Delivery. 
William B. Conklin: 

It costs us on an average for bottled milk at the present time 
four and one-quarter cents, that is in the country. 

Freight $0.0125 

Bottling ; . 0075 

Carting ... .0025 

Delivery by man to the consumer .0125 

Office help and extra riders . 0150 

Total $0 . 0925 



This does not include wagon repair, extra bottles or rent. In 
June the lowest price at which we have been able to buy milk is 
two and one-half cents. 



32 



[Senate 



Prices Paid to the Producers for Milk at Price's ' 

Station, N. J. 

Cents 

1907. per quart. 

April 3i 

May 3 2} 

June 2 J 

July 2i-2} 

August 3-3i 

September 3i-3| 

Average for six months .03 

per cwt. 

October $1.80 

November 2 . 00 

December 2 . 00 

1S08. 

January 2 . 00 

February 2.00 

March 1 . 80 

Average for six months SI . 933 

April $1.60 

May 1.30 

June 1.10 

July 1.25 

August 1 . 35 

September 1 . 50 

Average for six months $1 . 35 

October $1 . 70 

November 1 . 90 

December 1 . 90 

1909. 

January 1 . 90 

February 1 . 90 

March 1 . 70 

Average for six months $1 . 833 



IS^o. 45.] 33 

per cwt. 

April $1.50 

May • 1.25 

June 1 . 05 

July 1.20 

August 1.35 

September 1 . 45 



Average for six months $1 . 30 



"fe 



October $1.90 

November 2 . 00 

December 2 . 05 

1910. 

January • • • • 2 . 05 

February 2.00 

March 1.80 

Average for six months $1 . 966 

Prices Paid to the Producers for Milk at Montgomery, N. Y. 

1907. per cwt. 

April $1.20 

May 1.00 

June .90 

July 1.00 

August 1 . 10 

September 1 . 20 

Average for six months $1 . 0833 

October 1.40 

November 1 . 50 

December 1 . 65 

1908. 

January 1 . 65 

February 1.45 

March 1.30 

Average for six months $1 . 4916 

2 



34 [Senate 

per cwt. 

April $1 . 35 

May..... 1.10 

June 1.00 

July 1.10 

August 1 . 30 

September 1 . 35 



Average for six months . $1 . 20 



October $1 . 50 

November 1 . 75 

December 1 . 70 

1909. 

January 1 .70 

February ' 1 . 70 

March 1 . 50 



Average for six months $1 . 6333 



April $1 . 25 

May .. 1.05 

June .95 

July 1.05 

August 1 . 30 

September 1 .35 



Average for six months $1 . 1586 



October $1 . 75 

November 1 . 85 

December 1 . 90 

Average for three months $1 . 8333 



Prices Paid to the Producers for Milk at Orange 

County, N. Y. 

Cent Cent 

1907. per quart. per cwt. 

April 3i $1.50 

May ... 3-2i 1.35 

June 24 1.10 



]^o. 45.] 35 



July 

August 

September 

Average for six months 

October 

November 

December 

1908. 

January 

February 

March 

Average for six months 

April 

May 

June 

July 

August 

September 

Average for six months 

October 

November 

December 

1909. 

January 

February 

March 

Average for six months 



"b 



April 
May. 
June. 
July. 



Cent 
per quart. 


Cent 
per cwt. 


2i-2| 


$1.25 


3-3i 


1.35 


3i-H 


1.50 



3 


$1,343 


4 


$1.80 


4 


2.00 


4 


2.00 


4 


2.00 


3f 


2.00 


3i 


1.00 


3.875 


$1,953 


3i-3 


$1.60 


2|-2i 


1.30 


2i 


1.10 


2i 


1.25 


3 


1.35 


3-3i 


1.50 


2.2771 


$1.35 


31 


$1.70 


3i 


1.90 


4 


1.90 


SI 4 


1.90 


SI 4 


1.90 


3i 


1.70 


3.812 


$1,833 



3i 


$1.50 


2f 


1.25 


2i 


1.05 


21 


1.20 



36 



[Senate 



Cent Cent 

per quart. per cwt. 

August 3J- $1 . 35 

September 3^ 1 . 45 

Average for six months 2.8958 $1 .30 

October 3| $1.90 

November 4 J 2 . 00 

December 4^ 2 . 05 

January 2 . 05 

February 2 . 00 

March 1 . 80 

Average for six months 4 . 041 $1 . 966 

John P. Wierk. 

175 bottleS; daily average deUvery, per wagon. 

Cost of m"ilk (per quart) $0 . 0424 

Cry. expense . 0050 

Cartage from Jersey City . 0025 

Freight . 0080 

City dehvery . 0162 

Pasteurizing and capping .0045 



.0786 
.0040 



.0826 



Wear and tear on horses, harness, wagons, insurance, rental, 
depreciation on machinery, clerical help, not included in the above 
figures, or interest on investment. 



Charles H. C. Beakes. 

Prices Paid to Fariners. 

1907. 1908. 

100 lbs. Qt. 100 lbs. Qt. 

January 1.67 .0367 1.82 .03931 

February 1 . 53 . 03277 1 . 74 . 03647 

March 1.41 .03035 1.60 .03426 

April 1.39 .03033 1.37 .02871 



1909. 
100 lbs. 


Qt. 


1.76 


.041 


1.73 


. 03748 


1.54 


. 03652 


1.33 


.03095 



Xo. 45.] 



37 



1907. 1908. IfO^. 

lOOlbs. Qt. 100 lbs. Qt. 100 lbs. Qt. 

May 1.17 .02645 1.09 .02366 1.08 .02575 

June 99 .02248 .92 .01991 .90 .02144 

July 1.10 .0242 1.05 .02241 1.09 .02697 

August 1 . 28 . 02906 1 . 22 . 02741 1 . 25 . 03143 

September 1 . 42 .0317 1 . 34 . 02900 1 . 43 . 03557 

October 1.72 .03890 1.60 .03678 1.70 .04148 

November 1.82 .03931 1.72 .03848 1.84 .04301 

December 1.82 .03931 1.77 .03970 1.91 .04547 



The foregoing prices are the absolute net money paid to the 
farmer and do not include any other expenses, such as cans fur- 
nished to the farmer, can washing or any other expense whatsoever 
in the matter. 

Alexander Campbell: 

Including everything, and its distribution. In that case I say 
the cost is not less than four and three-eighths cents. And during 
the warm weather when much ice is required for the preservation 
of the milk, and to meet the requirements of the board of health, 
in regard to its temperature, the cost is fully five cents per quart; 
that was our experience. 

Here is the expense of the several stages in dealing with a quart 
of milk under favorable circumstances from its first receipt to its 
final delivery: 

Cents. 

Handling at the country creamery 375 

Freight to Jerse}' City 75 

Truckage to city creamery 375 

Bottling and pasteurization 25 

I don't think that quite enough for that item. Maybe a 
little too much on the others. 

Bottles and caps 25 

Ice during entire handling '. 375 

Deliverv to trade 2 . 00 



4.375 



38 ■ [Senate 

' Dealers' Handling Expenses. 

Compiled by C. H. C. Beakes. 

Wholesale. 

Creamery 12/40 . 0030 per qt. 

Freight 32/40 .0080 per qt. 

Carting, railroad to office 10/40 .0025 per qt. 

Delivery 20/40 . 0050 per qt. 



Total (exclusive office expenses) 0185 per qt. 



Retail. 

Bottling and handling at creamery 30/40 .0075 per qt. 

Freight 40/40 .0100 per qt. 

Cartage 20/40 . 0050 per qt. 

Route delivery • , 2.10/40 .0225 per qt. 

Total (exclusive office expense) 0450 per qt. 



Prices Paid by Borden's Condensed Milk Co. to Farmers, 
1908 AND 1909, AS Compared with Exchange Prices. 
(Prices Paid by Exchange Obtained from " Milk Re- 
porter.") 

Borden's Borden's 

Exchange. price plus or minus Exchange. 

1908. Per qt. Per cwt. per cwt. Pius Minus. 

January.... 04000 

February 03750 

March 03500 

July 02500 

August .03000 1.395 1.35 —.045 

September 03125 

October .03750 1.744 1.70 —.044 

November 03833 

December' 04000 



1909. 

January 03910 

February 03634 

March. .. 03500 



1.860 


2.00 


+ 


140 


1.744 


2.00 


+ 


.256 


1.628 


1.80 


+ 


172 


1.163 


1.25 


+ 


.087 


1.395 


1.35 
1.50 






1.453 


+ 


.047 


1.744 


1.70 
1.90 






1.783 


+ 


.117 


1.860 


1.90 


+ 


.040 


1.819 


1.90 


+ 


.081 


1.690 


1.90 


+ 


.210 


1.628 


1.70 


+ 


.072 



:Ko. 45.] 39 

Borden's Borden's 

Exchange. price plu.s or minus Exchange. 

1909. per qt. • per cvvt. per cwt. Plus. Minus. 

July 02750 

August 03129 1.455 1.35 —.105 

September 03500 1.628 1.45 —.178 

October 03750 

November 04050 

December 04250 



1.279 


1.20 
1.35 
1.45 
1.90 






1.455 






1 628 






1.744 


+ 


.156 


1.884 


2.00 


+ 


.116 


1.997 


2.05 


+ 


.073 



PRICE OF FLUID MILK IN BOTTLES REPORTED TO PRE- 
VAIL IN OTHER CITIES. 

Exhibit V-E. 

Per quart. 

Montreal, Canada. Half bottled in city; balance 

at dairies, three miles outside of the city; sold for. 9 cents. 
ScRANTON, Pa. Two dealers bottle in the countrj^; 

one sells at 9 cents. 

the other at 10 cents. 

Philadelphia, Pa. About 10 per cent, of supply 

bottles at the farm, sells for 10 cents. 

One dealer supplying West Philadelphia, bottling 

at Kennett (just outside of city limits) sells for. . . 8 cents. 
Baltimore, Md. All milk bottled in the city; sold at 9 and 10 cts . 
Buffalo, N. Y. Only, one dealer bottles at dairy; 

sells for 12 cents. 

Albany, N. Y. One dealer bottles at dairy (claims 

milk is certified) and sells at 14 cents. 

Boston, Mass. Milk bottled at farm sold by four 

dealers, at 11 to 20 cts. 

Milk bottled at Agricultural State Farm sold at . . 16 cents. 

Three of the largest dealers, bottling in Boston, 

sell at 9 cents. 

Providence, R. I. Thirty-six bottle at the farm 

and sell at 7 and 8 cts. 

Majority sell at 8 cents. 

Lowell, Mass. Two dealers bottle at the farm; 

sell for 7 and 8 cts. 

Manchester, N. H. Two dealers bottle at the 

farm; sell some for 8 cents. 

But most is sold at 10 cents. 



40 [Senate 

Per quart. 

Lawrence, Mass. Milk bottled at the farm; sells 

for ' 7 and 8 cts. 

Medford, Mass. Sixty-two milkmen in this town; 

sell for 8 and 9 cts. 

Portland, Me. Bottled in the city; sells for 8 cents. 

Hartford, Ct. Farmers bottle at farms near town; 

sell for 8 cents. 

Springfield, Mass. Bottled in the city; sells for. . 9 cents. 

Portland, Me. Bottled in the city; sells for 8 cents. 

Norfolk, Va. Milk bottled at dairies near city; 

not sold for less than 10 cents. 

Washington, D. C. All milk bottled in the city; 

sells for 9 cents. 

Charleston, S. C. Uniform price, milk bottled 

in the city 10 cents. 

Wilkes-Barre, Pa. Milk bottled at the farm; 

sells for 10 cents. 

St. Paul, Minn. Milk bottled in the cit}-^; sells for 7 cents. 
Minneapolis, Minn. Milk bottled in the city; 

sold for 7 cents. 

New Orleans, La. All milk bottled in the city; 

sells for 10 and 12 cts. 

Pittsburg, Pa. Some bottled in the country, most 

in the city; sells for 9 and 10 cts. 

Jacksonville, Fla. Bottled at dairies ^' in im- 
mediate neighborhood " • 12 and 13 cts. 

Syracuse, N. Y. All bottled in the city; sold for. . 7 cents. 
Salt Lake City, Utah. 'SSo-called sanitary prod- 
uct, in bottles '' sells for 10 cents. 

Atlanta, Ga. Practically all milk bottled in the 

city; sells for 10 cents. 

Omaha, Neb. All milk bottled at the farm; sells for 10 and 12^ cts. 
Quebec City, Can. Milk bottled in the city; sells 

for 10 cents. 

Toronto, Can. Milk bottled in the city; sells for. . 10 cents. 
San Francisco, Cal. Milk bottled at the dairy 

under sanitary conditions 15 cents. 

Milk bottled in the city sells for 10 cents. 

San Francisco Suburbs. Oakland, Alameda, 

Berkley. Milk bottled in the city; sells for. ... 11 cents. 
Cleveland, Ohio. All milk bottled in the city; 

sells for 8 cents. 



]Sio. 45.] 41 

Per quart, 

Birmingham, Ala. Milk is bottled at dairies just 
outside of the city limit s, and brought in on 
wagons; sells for 10 cents. 

Memphis, Tenn. Bottled at dairies adjacent to the 

city and brought in on wagons and delivered .... 10 cents. 

Rochester, N. Y. Put up at the dairy, claimed 

certified 10 cents. 

Los Angeles, Cal. Bottled at the dairy; sells for . . 10 cents. 

St. Louis, Mo. Bottled in the city; sells for 7 and 8 cts. 

Kansas City, Mo. Bottled in the city; sells for. . . 10 cents. 

Butte, Mont. Little sold in bottles; that which is 

is bottled near Butte and brought in; sells for. . . 10 cents. 

Missoula, Mont. Milk collected by wagons; some 
bottled in city; sold 12 quarts for $1.00, or, per 
quart 8J cents. 

Great Falls, Mont. Milk brought to city on 
wagons and usually delivered in bulk; bottles 
carried for special customers 8J cents. 



42 



[Senate 



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"No. 45.] 43 

North Atlantic Division. 

Maine. Massachusetts. New York. 

New Hampshire. Rhode Island. New Jersey. 

Vermont. Connecticut. Pennsylvania. 

From Twelfth Census of the United States — Part I. 

State of New York. 1880. 1890. 1900. 

Total population 5,082,871 6,003,174 7,268,894 

Urban population. Living in 

places of 4,000 or over .... 2 , 726 , 367 3 , 805 , 477 5 , 176 , 414 

Rural population 2 , 356 , 504 2 , 197 , 697 2 , 092 , 480 

Number of urban places 58 84 83 

Per cent, of urban of total 

population 53 . 6 63 . 4 71.2 



United States Census Bulletin on Population — No. 4. . 

In 1880 43.6 per cent, of population in New York lived in country 
districts. 

In 1890 34.8 per cent, of population in New York lived in country 
districts. 

In 1900 21.7 per cent, of population in New York lived in country 
districts. 



EXHIBIT 5-D. 
Typical Contract by Borden's Condensed Milk Company. 



This agreement, made this day of September 15, 1909, 

between BORDEN'S CONDENSED MILK COMPANY, party 
of the first part, hereinafter known as the company, and each of 
the undersigned, parties of the second part, hereinafter known as 
the dairyman, 

Witnesseth, That the parties hereto, for and in consideration of 
the sum of one dollar, each to the other in hand paid, receipt of 
which is hereby acknowledged, each agree individually, and not 
for others, to perform the agreements herein set forth, and specified. 

The dairyman agrees to sell and deliver daily to the company, 
at its plant at Whitneys Point, at the hour it names, the amount 



44 [Senate 

of milk produced by his or her dairy, as specified below, the milking 
of the morning of delivery and evening preceding, such milk to be 
whole, sweet and unadulterated and uncontaminated; 

That the cow stables will be amply lighted with windows and 
well ventilated; to keep them clean, removing daily therefrom all 
manure or foul material; to use no horse manure or foul material 
for bedding; to keep no hogs, sheep or fowls housed in said stables; 
to keep the cows clean; 

To thoroughly wash and rinse all milk utensils used in the dairy 
immediately after use morning and evenings; to rinse the milk 
cans and covers with clean water before putting milk therein; 
to put no milk in unclean cans; to keep the outside of cans and 
covers clean and bright, and when not in use to keep the cans up- 
side down, with covers off, on a rack elevated at least three feet: 

To provide a milk house within clean surroundings, lighted and 
ventilated, of suitable capacity and not connected with any stable 
or kitchen; to be painted or whitewashed inside, to be used for 
the safe keeping of milk and for no other purpose, unless for storing 
milk utensils; 

To have the milking done with dry hands, in the most cleanly 
manner; immediately after milking to remove the milk, including 
strippings, to the milkhouse, strain it through a 100-mesh wire 
cloth strainer, and to cool the milk to 58 degrees within forty-five 
minutes from the time it is drawn from the cow, by placing the 
cars of milk in a vat of water and frequently stirring the milk, or 
by the use of approved aerators; to keep the cans of milk in the 
vat of water until the time for delivery; to prevent the milk from 
freezing or rising in temperature, to exceed 58 degrees between 
forty-five minutes after drawn from the cows and when delivered 
at the company's plant, to which place it shall be transported on 
a spring wagon, covered with a clean canvas; to not mix evening's 
and morning's milk, except the remnants of each milking; to not 
deliver the milk from a cow that has calved within ten days or 
from a cow which will calve within sixty days, or from any cow in 
an unhealthy condition; 

To whitewash the cow stables, sides, ceilings and stalls, thoroughly 
throughout, within thirty days after signing this contract; 

To not feed the cows, ensilage, wet brewery or distillery grains 
or any feed which will impart a disagreeable flavor or odor to the 
milk; 

To immediately notify the company in case of any sickness 
or disease among the cows of the herd; 



Xo. 45.] 45 

To immediately notify the company if any member of his or her 
household; or an}^ member of any family occupying the premises 
on which the milk is produced, has any infectious or contagious 
disease, or any person who may be assisting in the work of the 
dairy who comes in contact with any infectious or contagious 
disease. 

When such notification is given and the company shall deem it 
necessary to discontinue to receive the milk of said dairy, the 
company will remunerate the dairyman for such loss incurred on 
the milk during the period of sickness, or until the danger of con- 
tagion has been removed. 

It is mutualh' agreed that the representatives of the company 
shall at reasonable hours have access to and the right to examine 
the cows, cow stables, milkhouse feed, dairy utensils and place for 
keeping same; and that if any cow is found to be suffering with 
any disease which, in the judgment -of the company's representa- 
tive, would tend to produce unwholesome milk, such cow shall 
be removed from the herd, either temporarily or permanently, as 
may be necessary to insure wholesome milk; but there shall be no 
needless sacrifice in any herd, and sufficient evidence of the existence 
of disease shall be produced to warrant the removal of any cow; 

That should the dairyman be unable to make deliveries of milk 
to the company, because of the action of legal authorities, he or 
she will give notice to the company and shall be under no obliga- 
tion to deliver milk to the company; if, because of conditions 
caused by the elements, floods, or fire, accident, action of legal 
authorities, interruption of railroad transportation facilities, 
strikes, or inability to secure necessary supplies, the company be 
prevented or hindered from operating its plant, manufacturing 
or preparing the milk for shipment, or shipping or marketing its 
products, the company shall give notice of the fact and shall 
thereafter be under no obligation to receive milk from the dairyman 
])ut at the end of such period or periods and when normal con- 
ditions are restored, the parties to this agreement shall, and are 
hereby bound to, continue the performance of this agreement; 

That failure to comply with the requirements of this agreement 
by the dairyman shall be sufficient warrant for the company to 
refuse to receive milk from the dairyman until such time as the 
conditions of this agreement are complied with, and in such event 
the company shall in no way be held liable for any losses sustained; 
that the company has the right to cancel this contract in case it 
has satisfactory evidence that adulterated, skimmed or con- 



46 [Senate 

taminated milk is being delivered or offered for delivery by the 
dairyman. 

The company agrees to buy from the dairyman the number of 
pounds of milk assigned individually, if produced and handled as 
specified herein; to wash and clean at its plant the inside of all 
cans in which milk is delivered; to pay on the fifteenth day of the 
month following month of delivery the following price for milk 
accepted: 

Daily average to be delivered, 250 pounds at $1.80 per 100 
pounds for the month of October, 1909. 

Daily average to be delivered, 200 pounds at $1.95 per 100 pounds 
for the month of December, 1909. 

Daily average to be delivered 250 pounds at $1.90 per 100 pounds 
for the month of November, 1909. 

Daily average to be delivered, 200 pounds at $1.95 per 100 pounds 
for the month of January, 1910. 

Daily average to be delivered, 200 pounds at $1.90 per 100 pounds 
for the month of February, 1910. 

Daily average to be delivered, 250 pounds at $1.70 per 100 pounds 
for the month of March, 1910. 

In witness whereof, the parties have hereunto interchangeably 
set their hands the day and year first above written. 

BORDEN'S CONDENSED MILK CO. 



TESTIMONY OF MARVYN SCUDDER, ACCOUNTANT 

FOR STATE. 

Summary. 
Borden's Condensed Milk Company: 

Net profits on fluid milk and cream, after all deductions. New 

York and Chicago, year ending June 30, 1909, $793,622.05 

(p. 1140); year ending June 30, 1908, $514,783.35 (p. 1140), 

Total net profits year ending September 30, 1909, $2,617,029.40 

(p. 1141). 
Capital stock, $25,000,000. (Of this amount, $15,428,408.46 
trade-mark, patents and good will) (p. 1142). 
, Net profits, after all deductions, on fluid milk and cream (New 
I- York alone) year ending June 30, 1909, $682,367.16; year 

'• : ending June 30, 1908, $512,243.89 (pp. 1142 and 1143). 



Iso. 45.] 47 

Net profits, after all deductions, on fluid milk, New York alone, 
year ending June 30, 1909, $496,976.36; year ending June 

30, 1908, $326,579.99 (pp. 1143 and 1144). 

Net profits, after all deductions, on fluid milk and cream, New 
York and Chicago, nine months ending September 30, 1909, 
$1,076,772.15 (p. 1144); nine months ending September 30, 
1908, $753,824.50. 

Net profits, after all deductions, on fluid milk alone, New 
York and Chicago, nine months ending September 30, 1909, 
$779,407.92 (p. 1145); nine months ending September 30, 
1908, $439,054.80. 

Sheffield Farms, Slawson & Decker Company: 

Capital stock (June 30, 1909), $500,000 (p. 1147); (Subse- 
quently issued) $91,400 (p. 1147); total $591,400 (of this 
amount, $302,436.51 issued for good will). 

Net earnings, after all deductions, fiscal year ending February 
28, 1909, $221,694.63 (p. 1149). 

Net earnings, after all deductions, nine months ending October 

31, 1909, $257,923.42 (p. 1149). 

Dividends (1909) (p. 1150): 

February, $5,000 (1%); March, $5,000 (1%); April, May 
June and July, $10,000 each (2%); August, $54,650 (11%); 
September, $11,859.93 (approximately 2% on additional 
stock). 

Dividends (1908) (p. 1151): 

March, $5,000 (1%); April, May and June, $10,000 each 

(2%); July, August, September, October, November, 

December, January and February, $5,000 each (2%). 
Dividends (Borden's Condensed Milk Co.) (p. 1155); 1909 and 

1908, $1,400,000 (8%) com.mon; $450,000 (6%) preferred; 

1907 and 1906, 10% common; 6% preferred. 
Mortgage debt — (October 31, 1909) of Sheffield Farms, 

Slawson & Decker Co., $352,400 (real estate mortgages, p. 

1158). 
-Surplus— (October 31, 1909) Sheffield Farms, Slawson & 

Decker Co., $962,672.02 (p. 1159). 
Surplus — (June 30, 1909) Borden's Condensed Milk Co., 

$8,824,230.58 (p. 1159). 



48 [Senate 

Alexander Campbell Milk Company: 

Net profits, six months ending June 30, 1909, $49,880.04 
(p. 1160); year ending December 31, 1908, $44,006.56 
(p. 1160). 

Dividends, June 30, 1908, $11,315; December 31, 1908, 
$11,352.50; June 30, 1909, $11,434.50 (p. 1160). 

Capital stock, $387,000, or thereabouts (p. 1161). 

Amount added to surplus of Campbell Co., during year ending 
December 31, 1908, $21,339.06 (p. 1163); for six months 
ending June 30, 1909, $38,445.54 (p. 1163). 

Amount charged off for depreciation (Sheffield Farms, Slawson 
& Decker Co.) year ending February 28, 1909, $26,990.82 
(p. 1165); for eight months ending October 31, 1909, nothing 
charged off on books of company for depreciation; $48,000 
allowed for depreciation before arriving at net profit of 
$257,923.42 (p. 1164). 

Delos Axtell : 

I reside at Deposit, Delaware countj^^ about 17'6 miles from 
'New York. I have been a farmer all mv life and I have been 
super visoT of a farm since 1906. It cost me a little over 3c. a 
quart to produce milk during the years 4905—6-7—8. I think 
the cost of i^roduction was a trifle more in 1908 than the previous 
years. I think the cost of ]>roduction in 1909 has advanced some- 
wdiat over that of 1908. I don't believe that a man could produce 
milk in cither the years 1908 and 1909 at less than 3^c. a quart. 
I should say that a fair profit might be obtained from milk, say 
for five months of the year for 3c. and 5c. for the remaining seven 
months, and I am basing my opinion on the conditions that exist 
in my locality. If I was unwilling to accept the price whicli 
Borden offered for my milk, I could send it to the butter factory. 
I could take my milk there aud pay 3c. a pound for having the 
butter made up and take my chances on the market, or I coidd 
sell to a farm there that buys milk at Exchange prices as a rule, 
but this year this farm is giving a choice of either the Borden 
prices or the Exchange prices. There has not been much differ- 
ence in recent years betw^een the Borden and the Exchange price; 
that is, averaged for the w^hole year. I have been in the Borden 
creameries in my ^'icinity and have seen separators in operation 
therein. I have seen the milk running in from the vat and have 



N"o. 45.] 49 

seen the cream after it is separated from the milk go into the 
recej^tacle that it would naturally spout into. I have never 
seen them reunite it. In recent years Bordens have cleansed 
their milk hy putting it into the separator. I have under- 
stood from friends of mine that are in the business that a 
separator can be set so that they can take off enough cream 
to leave a 3 per cent, butter fat milk. Bordens manufacture 
different grades of cream : they have a separator adjusted sO' that 
it will separate it and grade it. I have heard that there is in 
existence a Consolidiated Milk Exchange which fixes the price to 
consumers. Borden's factorv has been in mv vicinity from eis'h- 
teen to twenty years. Consequently their price has largely con- 
trolled us. Prior to 1908, the Borden price was on the average 
better than the Exchange price. They have been pretty nearly to- 
gether for the last two years, and as I have stated before, you can 
take your pick. The Alutual Cream and Milk Company, in my 
vicinity, buy milk at Exchange prices. I do not know of anything 
that would lead me to believe that there exists any combination 
among the dealers of Xew York city to fix or control the price 
paid by them to the producer. I don't think the raise in price in 
Xew York from 8c. to 9c. benefited the producers in our section 
any, because I think the price had been established. There is 
not a flush of milk in my section at the present time. I can see 
how a flush of milk among the dealers in Xew York city might 
be brought about, that is, by the raise in price of Ic. a quart, and 
the 2C)C. freight zone. My opinion is, in my section, milk can 
be produced cheaper in summer than in winter. If the Mutual 
Company V\'ere buying milk at exactly the same ])rice as Borden 
or giving the producer his choice between Borden and the Ex- 
change price, there could not be much competition. It would 
sort of convince a man- that the Exchange price and Borden's 
])rices weren't liable to vary uiuch. The question of establishing 
co-o]>erative creameries is being agitated among the farmers more 
than it ever Avas before, as a ])rotection. They go so far as to 
advocate the building of these creameries if they ai-e never used, 
aud have them in readiness in case that the Borden prices do not 
suit them, that they can manufacture their own milk; and I know 
of some instances where ]^eo])le have taken stock in creameries 



50 [Senate 

like that just for that purpose and no other. They are sending 
their milk to other places ; done it as a protection, and it is being 
advocated to quite an extent in our section of the country. But 
I think the f aimers ought to organize just the same as other fel- 
lows do ; that is my opinionj but it is a j)retty hard projDosition. 

OsMAN L. Barbeir: 

I reside at Canton, St. Lawrence county, IsTew York, and am a 
dairyman farmer, and have been the same practically all my 
life. I produced 76,9'31 pounds of milk last year, that is, about 
-38,000 quarts. I should say that the total cost of producing that 
milk in 190i9 was, grain $395, and silage, hay and grain fodders 
iind pasturage, $390. Labor I shouldn't put below $500. This 
is not counting in my own labor. The dairy averaged about six 
and a fourth cows for the year,- that is, I sold a few cows in March 
and estimated by the month it gave me seventy-five months for 
one cow or six and a quarter for the year. I sell my milk to the 
McDermott Company of 'New York city. I think it has cost me 
about 3^c. to 3fc., exclusive of the use of the farm. 

Q. Literest on the investment ? A. Yes, that is included in my 
labor at $500. 

Q. Do you sell to McDermott at the Exchange price or at 
Borden'si? A. Well, neither. They put out a price for six 
months in advance. 

I haven't compared it with the Exchange price but I think it 
is slightly under Borden's as a rule. I signed a contract in which 
a certain amount is specihed for each month during the six 
months. I am not acquainted with the Exchange price of milk, 
per month, but I sometimes happen to read them. There are 
other stations on the road, the R., W. & 0. division, operated 
by the Mutual Milk and Cream Company and the Phoenix Cheese 
Company. They are in the next town beyond there, Potsdam. I 
have no personal knowledge that there is a combination of deal- 
ers and it exists to fix a price that they will pay to the producer 
for milk. I should judge from reading the reports that a oombi- 
nation existed in New York city to i^aise the price of milk from 
Sc. to 9'c. a quart on l^ovember 1, 1909. I believe that the co- 
operative creamery and cheese factory is a benefit to the farmer. 
If it were not for the factory we would be dependent upon the 



:Xo. 45.] 51 

'New York market entirelv. The average price ^McDermott paid 
to me during the year 1909 was $1.51 per hundred pounds, 
that is, a little bit higher than the price paid for mine because 
mine was mostly winter milk; that would be about 3c. a quart. 

Teank W. Baudek: 

I reside at Fort Plains, Montgomery county. About 201 
miles from 'New York. I own and operate a farm about three 
miles south of Fort Plain. The farm is operated exclusively as a 
dairy farm and I keep about forty-five cows, about thirty to thirty- 
five milking cows. I produced about 8,500 pounds per cow. Dur- 
ing the year 190^9 the cost entering into this production would be 
the feed, plant and wear and tear of all things connected with it 
and the farm, the help, etc. I do not know what it cost to produce 
a quart of milk. I think a farmer should have 10 per cent. 
profit. I sold my milk to Fort Plain and Otsequage Valley 
Creamery Company. They manufacture milk into cream and sell 
it in New York, Albany and Schenectady. Borden's Condensed 
Milk Company also o^vn Fort Plain Dairy Kitchen. I obtain 
the price based a little bit upon Borden's price, running from 
five to ten cents per month per hundred under Borden's, because 
the restrictions were not at the creamery what they were at 
Borden's. My opinion is that a combination does exist among 
the dealers in J^ew York city. I am interested in the milk busi- 
ness so it might make a difPerence with your questions. I am 
one of the principal owners of this Fort Plain and Otsequage 
Valley Creamery Company, and I know lots of people in IN'ew 
York, and some of the people I am also associated with, some 
of them perhaps belong to this Milk Exchange, but I am not 
directly or indirectly connected with the Exchange in any way, 
shape or manner, have nothing to do with it. For my acquaint- 
anceship with the menibers of the Exchange, it is my opinion 
that there is a combination, yes, I know there is. My opinion 
is that the members of the Exchange are bound together, that 
they practically fix a price on the milk shipped to E'ew York 
city that the producer must accept or else not be able to market 
his milk. I do not know of any combination to raise the price 
made in iJiTovember, 1909, to nine cents. I have several sepa- 



52 [Senate 

rators but we never separate the cream and then add it to the 
milk to bring it np to the 3 per cent, butter fat. We can set 
our separator so as to run a 20 per cent, cream or a 40 per cent, 
cream. It would be rather difficult to set a separator so as to run 
a 30 per cent, butter fat milk, but the only way we could do that 
is to run it and add the cream back to it and make it just that. 
T would say that it is practically impossible to set the separator 
to do it, and the only way you could do it would be to separate 
it entirely and then add sufficient cream to make it 3 per 
cent, butter fat milk. Borden's factory ship both milk and con- 
densed milk. They have two plants here, and they bought one 
a few years ago of the Orange County Milk Association. They 
had separators same style as mine. 

gon^ditioks i¥ the coij^^try, cost of peoduc- 
i:ntg milk kni) the fair value of the same, 

ETO. 

Isaac C. Blanby: 

I reside in Greenwich, Washington county, 'New York, and 
have been running a farm of 240 acres for four years. I have 
thirty-six milking cows, sixteen or seventeen head of young stock, 
and six or seven horses. I do not recall the number of quarts of 
milk I produced in 1909, but I keep a record of the daily 
amount of milk produced. I cannot say how much it costs 
per quart to produce uiilk on account of it yarying so much from 
month to month, but I should think that it costs 'about 4^c. 
per quart tO' produce milk throughout the year. I run my farm 
entirely as a dairy and make money only from dairy products, 
such as milk, butter and some cattle. I run the farm by employed 
help and thus it cost me a little more than those that do the 
work themselyes. I have gotten on an average from; my milk 
during the year 6c. deliyered. I deliyer milk in the village and 
sell it retail and it costs me about 2c. and 2Jc. a quart to deliver 
it, because I can only deliver 200 quarts per day, and on 
this basis I am selling it a little under cost to produce. I 
am selling butter in the village at 3 Ye. or 38 c. a pound. There 
is yery little profit on it. I am continuing the business at a 
loss because I am interested in the community, and I believe that 



:^o. 45.] 5:3 

eveiituallj I will get a return on my money. The uncertainties 
of cost of 2^rocluction of milk is illustrated by the difference m 
value of heifer and bull calves. When I have heifer calves I get 
$75 for yearlings and the bull calves I sell for $2 apiece. 
Besides, some men do their own work and have children to help 
them, onlv pa vino- the hired man. In the East a bric'ht man can 
make more money at other business. My main business is in 
the paper business; farming is somewhat of a side issue with me. 
I am interested in the railroad in my community, and at the 
suggestion of Mr. Whiting, who was trying to build up a freight 
for the road through a milk route, I assisted. Boston furnishes 
£i market for milk in my community and Messrs. H. I. Hoyt and 
Whiting appear to control the Boston trade. If the middlemen 
iind the cattlemen could agree there might be some economy, as 
the wagons might be filled and thus deliver more than 200 
bottles per wagon. I do not know who makes the price; 
Borden's may know the most about it and the others follow. 
Some people say that they are all in one comibination. The 
separator cannot be used to draw oft' the excess of butter fat. 
I have ne^'e■r heard of it being done in our community. My 
suggestions to better conditions in Xew York are, that the city 
•should establish ])laces or receiving stations scattered throughout 
the city and the farmers ship there to middlemen, such open 
markets as Denmark has where butter and everything is displayed. 
This leaves the business open and subject to inspection and 
furnishes facilities to render the expenses from producer to the 
consumer. There should be some kind of regulation by the State. 
If the farmer could get more he would be in a position to produce 
a better quality of milk and still make a living. It may be 
possible that the trouble is that the middleman controls either 
the railroads or the receiving stations or docks in Xew York. 
Some facilities for shipping direct to ISTew York should be pro- 
vided. I would have stations at both ends of the country and in 
the city, with stations in the country controlled by the farmers. 
The farmers should have a station in the country so that they 
can ship their milk for manufacturing and thus be inde]}endent 
and thei'e should be free competition among the dealers in Xew 
York. 



54 [Senate 

Q. And you would have no exchange establishing prices? A^ 
Well, you can't do that, I don't believe. 

The middlemen have facilities for manufacturing and they 
also have facilities for doing the same in the country. When 
there is a big flow of milk the situation has to be controlled in 
some way. 

Q. Then you think an exchange properly organized down there 
would be a good thing? A. I don't doubt but what it would. 

It is very expensive to handle articles in !N^ew York and it 
might be a detriment to the farmer to trade and handle them 
himself. I am somewhat acquainted with the middlemen and 
they have many things to contend with. Same conditions exist 
in every line of business in !N^ew York. It is a '^ tally that you 
have to pay." It is so on entering any country or place. I think 
there is something to be said for the other side. There is an 
expense of handling milk when you have a, surplus. In the es- 
tablishment of an open market, I have considered the fact that 
milk is a very perishable article and not so advantageously sold in 
the open market as most other commodities. 'Eom, when the 
milk is in the open market and you have a surplus, you could put 
it in butter in ]K^ew York as well as in any other place, or put it 
into cream or hold it back. That is the reason I say the I^ew 
York end and the farm end has got to be in close touch so they 
need not ship too much milk into l^ew York and put it into* 
butter at the other end and put it into the cream, and they can 
hold creanx and they can hold milk for a long time. The dealers 
should receive the milk just as they would their ovru to-day, but 
the cleanliness should be looked to by the city government. The- 
situation would be helped in that it would give small buyers 
an opportunity to receive milk there. It would not be handled 
to such a large extent by these other large dealers. ]^ow, if 
you wanted to ship a hotel in New York city, it is very expensive 
to do it. When shipping in little bottles like that (indicating) 
like the Waldorf, they were paying as high as 5c. per quart for 
cream, but if you have a market by the city like the city market 
for other things — the details I haven't worked out in my head 
— -but that idea is that you could sell somebody there at a price^. 
and the man controlling it at the other end, which I believe enters- 



:^o. 45.] 55 

into the control of the price of milk, shut it off at the other end 
so you wouldn't have nearly the surplus in 'New York to take care 
of. If the farmer had some share in the making of the price 
in the Cbnsolidated Milk Exchange, that is, if the milk was 
offered to people that wanted it, they would buy up so that they 
would have a price established, I think that would be a case 
where the farmers in flush season would ship a whole lot more 
than is necessary, which should be kept back and put in the 
form of butter or some other product. I do not think the 
farmer could practically have a say in the making of the price by 
Exchange, because there would be people in the city who could 
save this milk and keep it for days there properly, and if the 
price went up they would serve it, and if it went down they 
would buy. I believe it is absolutely necessary to control the 
amount of milk going into Isew York city, and to have the price 
fair to the farmer. The fanners are getting more conversant 
with conditions and they will get their rights. The middleman 
is being crowded. He has his use, but it will be harder for 
him to do business in the future than it has been in the past. 
As soon as the farmer increases his knowledge of conditions,, 
then he will be able to control his milk supply to better ad- 
vantage. It lies with the farmer and it lies with the State to 
make transactions as open as possible and that there is no trickery 
about it. Look at the schemes that you hear of that the board 
of health have in iSTew York city for the purpose of cleanliness. 
If those schemes were lived up to, 'Ne^Y York would not get any 
milk at all. There is plenty of cattle that are killed that have 
no tuberculosis. In the testing of a cow — I am oidy taking 
this from j)eople that I know who know something about it — 
they can start the herd of cattle and get them excited, they will 
show these tests. If the cattle are quiet, they show no tubercu- 
losis. Those are the things and many more that make it so 
expensive to-day for the farmer to produce milk, and they should 
have a great deal more under these conditions. ISTew York city 
will have to pay for milk if she wants it. It is putting people 
out of business. I know of nothing that has developed in the year 
1909 that was not present in the year 1908 or 1907 that would 
cause the large milk companies to raise the price of milk. Our 



d() [Senate 

milk goes to Boston and I am more interested in the price paid 
at Greenwich than in New York. I know it is costing' a farmer a 
great deal more in the last two years. 

Geoege M. Brown: 

I reside at Hinsdale, Cattarangns' county, abont 400 miles from 
iSTew York city and have, w^hat might be termed, a dairy farm. I 
have been a farmer all my life. I have no figures as to exact 
cost of production of a quart of milk during the year 1909, but it 
is my opinion that it would cost from o^c. to Sic to produce a 
quart of milk during 190'9. T coaisider the following items enter- 
ing into the cost to ])roduce: Feeid, labor and plant, the farm, 
interest on the money, etc., invested. I think the producer ought 
to have 4c. per quart in order to realize a fair profit. I sell my 
milk to the Howell Jersey City Milk and Cream Company, and 
the balance of it goes to the cheiesie factory in the height of the 
season. I suppose I sell my milk at Exchange prices, that is 
what I inrdierstand, but don't have a contract with the HowtII 
Compauy. They usually post their price in a conspicuous plaCe 
on their building. I think it is the general understanding that 
the farmers in my vicinity get Exchange price. I take the 
'^American Agriculturist " and this paper has a column headed 
'' Exchange Price for Milk.'' There are no creameries in my 
immediate vicinity. I think the HowtII Company ship from the 
station from twenty-five to thirty cans per day. There is practi- 
cally a uniform price and this uniform ])rice paid by the dealecs 
tO' the farmers makes me think that a combination exists among 
the dealers in i^ew YoTk city to fix or control the price paid by 
them fo'r milk to the jn'oducer. I have talked with Borden's 
])atr()ns about the prices and they are very nearly the same. I. do 
not know of any agreement to' raisje the price from 8c. to 9c. on 
or about Notvember 1, 1909, to the consumers. I do not know 
whether a combination would be detrimental or beneficial to the 
producers. It might secure prices, make the prices more certain, 
the pay more certain. It is better to deal with a combination of 
dealers than with them individually. They are more reisponsible. 
But the fact is that they are not combined together ; they are com- 
posed of individual dealers that only act in concert on the price. 
IVhen the dealers get together to fix a price to the producer, which 



Xo. 45.] 57 

he has no voice in fixing, it wonld destroy compe:tition of course^ 
and it would be a detriment in that way. I should &ay that they 
would try to get the lowest price possible. I don't think they have 
any sepai-ator in Borden's plant, but know they have none in 
Howell's. We have a cheese and butter factory in our vicinity 
and I regard it as ^-ery important for competition. There U not 
very much variation between Borden's and Exchange prices. I 
think Borden is a little ahead. 

Edward J. Beowx : 

I I'eside near Angola, twenty miles from Buffalo. I have been 
a farmer all my life and produce milk. My farm is exclusively 
a dairy farm. Have about twenty-three cows. Our milk is sent 
to the city of Buffalo. Erom ]\f,ay 1, 1908, to May 1, 19^09, we 
produced 11,788 gallons. Estimated cost was, gluten $568.40; 
forty tons of hay at $9 a ton, $360; corn, $91; twenty-tw^o tons 
of silage, $38.40. Then we have to buy the ticketsi and' they re^ 
turn to us. They returned us $176.82. We have to buy the 
tickets and put them on to the stand, the shipping tickets, I2C. 
a gallon. We received 13c. for the milk, and 14^c with the tick- 
ets, delivered in Buffalo. We get 13c. in the country, or 14Jc. in 
the city, a gallon, that is, when w^e deliver a gallon of milk to the 
creamery they give us 13c. and a ticket, which represents l^c. a 
gallon, and when the milk reaches the city we cash those tickets, 
and they send us a check for 13c., plus the tickets. The cost of 
production as near as I could get was $1,264.62. We did not in- 
clude the cost of helj). I and my brother own the farm and do all 
of our own work. The cost of labor on that farm would cost about 
$90 a month. The total cost would be $1,264.62, plus $1,080 for 
labor. I have not figured in capital invested or depreciation. 
My farm would rent for about $350 a year. You look at this a 
little different than we would in figuring the eost, but from your 
figures that would make the total cost of production $2,694.62. 
We receive for all the milk we produce $1,709.06. From my way 
of figui-ing the cost of production is no more than what I receive 
for the milk. T actually receive over and above what it costs me 
for the milk, $444.44. The cost to ])roduce was about 2fc. a 
qnai't for the whole year. I think we should have a profit of 2c. 
a quart above all expenses. I think the profit ought to be ^c. ta 



58 [Senate 

§c. I sell my milk to C. W. Iluppuch. He is a dealer in the 
city of Buffalo. The Western ^ew York Milk Producers' Asso- 
ciation meets every year and figures to s-ee^ what we could make it 
for and set the price as near as we think ought to be right. In 
■our part of the State the producers fix the price to the dealer. 
We do not fix any established price. We fix a price as near as 
we think we ought to get or as near as we can get and then every- 
body sells for what they have a mind to. I am a member of that 
producers' association. We ^x the price, not by the month, but 
the year round. It is about the same. Sometimes we get 12^ 
for six months and 13 J for the other six months. Generally 
speaking, we get a uniform price. In Buffalo we also have, what 
vou miiy'ht sav, a combination amons: the dealers and we are on 
the fight all the while. 

Stewart S. Comfoet : 

I reside near Waverly, Tioga county, 'New York. With the 
exception of four years, I have been a farmer all my life. My 
farm is 265 miles from ISTew York city, operated exclusively as 
a dairy farm. I keep about twenty cows, milking on an average 
about eighteen, throughout the year. During the year 1909, I 
produced 50,38i2 quarts of milk. The total cost of production 
was $1,576.47. The items entering into the cost of prodiiction 
were grain, silage, hay and hauling. The seventeen tons of grain 
cost $510, ninety tons of silage, $450. Thirty-three tons of hay, 
$450. Hauling milk at 8-Jc. a can cost $121.47. In that cost I 
have not included labor, charge for cattle during the summer, de- 
preciation, repairs to buildings and interest on investment of capi- 
tal and in cows and also the farm buildings and the farm. It 
co'st on an average to produce a quart of milk in 1909, $.0246, 
without the charges for labor, etc., above set forth. Including the 
above charges, it could not be produced for less than 3c. You 
also have to count sickness. You have got to turn off from three 
to four cows every year. That is my experience. In order to 
realize a reasonable profit, in my opinion, I should have Ic. a 
quart profit over the three and a fraction. If I was receiving 4c. 
a quart throughout the year, I would consider that I was making 
a reasonable profit. I have not obtained anywhere near 4c. on 
an average in the past ten years. It is my opinion that I have 



'No. 45.] 59 

•sold my milk at about cost. In making up the total amount of 
jnoney that I received for the milk during 1909, let me add that 
I had back from our station 80 jDer cent, of the milk that we send 
in the form of skimmed milk. By careful experimentations one 
j'esLY, I found that that skimmed milk was worth to m© about 20c. 
a hundred pounds. Adding to that value of the skimmed milk 
ivhich is $26.46, adding to that the value of the calves, which I 
Talue at $25 a piece, the total is $1,933.57, making the total 
:amount that I received. I sold mv milk to James H. Owen, who 
lias a private creamery at Chemung, iST. Y. I am selling at ex- 
<?hange prices now\ For April, May, June and July, I was to get 
the Exchange price, less 16c. and the other eight months I was to 
^et Exchange price less 6c. We are in the 32c. zone and all of the 
milk that is bought in our section is on 6c. and 16c. off. Previous 
to the first of October our milk was taken at the creamery on the 
l)utter fat test, called the Babcock test, and they paid us accord- 
ing to the butter fat in the milk. Most of the farmers in my 
locality sell to the creameries, 6c. off for six months and 16c. off 
ior six months. They do not get the full Exchange price because 
the freight rate is 6c. extra. If a farmer in my locality thought 
that the Exchange price or the Borden price was too low, he would 
liave to keep his milk at home as the private creamery had stopped 
running and you can't get a responsible firm or dealer in Xew 
York to handle milk independently. You can sell it but you can^t 
get satisfactory pay for it. I know of one instance where a man 
is selling to some small firm in Brooklyn, and he told; me he was 
-$700 behind. I understand that all the responsible dealers in 
]^ew York city insist on buying milk at either Borden or Ex- 
-change prices. Taking it on an average, I think the Borden's 
•and Exchange price will average about the same throughout the 
year. If Borden should put out a price of milk for $2 a hundred 
pounds three months after and at that time there was a great 
:flush of milk in the market, $2 a hundred Avould not represent 
the value of milk according to the law of supply and demand and 
that would show that the price of milk as established is an arbi- 
trary price and not dependent upon the supply and demand. Bor- 
den's is an arbitrary price. They set it six months in advance. 
The Exchange is not set six months in advance. The Xew York 



60 [Senate 

Dairy Produce Company have a creamery in Chemung. I find 
the price they are going to pay from the '^ Country Gentleman/^ 
the ^'American Agriculturist/' and the " Milk Reporter/' and they 
all have a column which is entitled '^Exchange prices" and in 
that colunm is set forth the prices that have been estahlished by 
the Consolidated Milk Exchange for milk. There is no doubt in 
my mind when I see an Exchange price but that I will get that 
price for my milk, less the amount as charged in freight zone. 
Following are the average prices I received for butter fat when 
I sold my milk by test: 1909, January, 35; February, 32; 
March, 30; April 28^; May 27-| ; June, 25; July, 2(3; August, 
30; September, 30 2/10. That price is for a pound of butter 
fat. In 1908, Jainuary, 43; February, 40; March, 3'5 ; April, 
26; May, 23^; June, 23^; July, 24; August, 28; September, 32; 
October , 38; November, 38; December, 41. In 1907, January^ 
38; February, 35; March, 35^; April, 31; May, 25^; June, 25; 
July, 27-J; August, 34 J; September, 37; October, 41; ]!^oveanber, 
41 ; December, 41. The above figures represent cents pei' pound. 
As apraetical producer of milk, I would state that if it is good 
and clean, it begins to deteriorate in about forty-eight hours after 
it has been taken from the cow. If there was no combination 
among the dealers in ^ew York city to fix or control the price, 
paid by them to the producers of milk, why would one dealer bid 
up when he is a little short. They never do; when the diealers all 
buy on the same price, there is an agreement somewhere. As to 
my knowledge of a combination or agreement among the dealers 
in ^N^ew York city, to fix or control the price to be charg-ed by 
them to the consumer, how did it happen that they all raised from 
8c. to 9c. at the same time if there was not any agreement. That 
would incline me to believe that there was an agreement. I don't 
know anything about it personally. I am of the opinion that the 
existence of* this Consolidated Milk Exchange is not beneficial to 
the producer. If each one had to make their independent price^ 
I think there would be a chance for them to bid up. In my mind, 
there is practically no competition in the milk trade in my county. 
I believe that this state of the milk trade, eliminating all compe- 
tition, is due to the fact that the Milk Exchange fixes prices, which 
are about the same as Borden's prices. I wish to correct myself^ 



Xo. 45.] 01 

There is oiie part of the county at Wellshurg, the Xewark Milk 
& Cream Company rmis a receiving plant, a condensory, but their 
prices are practically Exchange prices. It is my opinion that it 
is the custom in my county of taking milk, delivering it at the 
creamery, ]nit it through a separator, and then reunite a portion 
of the cream with the milk so as to make a milk that is just above 
the 3 per cent, butter fat, and retaining the excess of cream and 
sending the milk to the N^ew York market. There would not be 
any object in offering a premium for milk that has an excess of 
butter fat in it if they are going to sell their milk as fluid milk. 
Of my own knowledge, I do not know of any creamery in my 
locality where this separating is carried on. I think that in an 
average year 44c. would be a fair price to the farmer, or 4c. in 
the summer and ~}q. in the winter. 

Herbert E. Cook : 

I am a farmer and cheese and butter maker, and am dean 
of the School of Agriculture of St. Lawrence University, and 
have been connected in that capacity since September 1, 1909. 1 
have been connected with the State Department of Agriculture 
for a number of years. My farm is located at Denmark, Lewis 
county. 1 live at Canton. ]\lilk is n\v chief product. I ]:)roduce 
about 4,500' quarts per cow from 40 cows ; that would be a total 
•of about 180,000 quarts in a year. Approximately, if all the 
■expenses put upon a cash basis, present prices of labor and cost 
of investment, I should say it would approximate very closely to 
4c. a quart to produce milk. It will cost more to produce milk 
showing 5 per cent, butter fat than milk with 3 per cent, butter 
fat. In my opinion, the cost of production of milk would be : 
interest on the investment, labor and feed. If the interest on the 
investment included the depreciation of the property, why those 
items would practically cover the cost ; if they did not, then the 
depreciation on the property, the keeping up of buildings and 
machinery and the loss yearly in the dairy, which is a very 
important item. We are employing in our school work a book- 
keeper at $1,200 a year. I do not think that he is doing any 
more work than would be required to determine accurately the 
'Cost of producing the milk and the products of my farms. I 
i;hink a fair price for the producer to get for his milk Avould be 



Q2 [Senate 

10 per cent, above full cost. I sell my milk to Sam Levy. Our 
price is fixed by the price paid at Deer River and Carthage,, 
and those prices are fixed on the Exchange price, which fixe& 
our price. In other words, our price is practically the Exchange 
price. I have a written contract with Levy only for the winter. 
In summer our milk is manufactured into whatever we choose.. 
Our contract is based upon Deer Hiver prices and Deer River 
prices are based upon ^ew York Exchange prices. Borden's- 
operate a creamery in JSTorthern ^ew York. I recall only two in 
St. Lawrence county; there may be more. E^one in my immedi- 
ate vicinity. I do not think that during the last twO' or three 
years Borden's price and the Exchange price have materially 
varied ; perhaps islightly in favor of Borden prices, but prior to- 
that there was a very distinct variation. I know the Borden 
prices are made six months in advance. I suppose there might 
be a combination among the milk dealers in 'New York city 
to control or fix the price to the producer. I think that might 
be the human equation in the situation if they could, but I 
don't know. I base my opinion on the general proposition of 
the tendency of human nature to get together. It is the spirit 
of the times to relate and co-ordinate and federate. On that 
basis I should say that there was a chance that they were — I 
don't suppose those men are fighting each other. I think the 
prices and the situation in the country are more satisfactory than 
they were when there was a strong warring element among milk- 
men in New York city. I regard a situation in which a number 
of dealers combine together to ^x the price to the producer 
with their natural interest to fix as low a price as possible 
detrimental to the producer on general principles, as that would 
mean danger to the man with whom they were dealing. I do not 
know whether there is any understanding between Bordens and 
the Exchange in reference to the fixing of the price. ;.I think 
every one knows that the skimming of milk was dons so that it 
still came within the 12 per cent, solids and 3 per cent, butter 
fat, and was very common in the winter time over those sections 
where the milk contained more than a normal amount of butter 
fat. I think there have been two or three indictments in Lewis 
county within the last two years for skimming milk. The De- 



]S"o. 45.] 63 

partment of Agriculture made a general inspection, if I under- 
stand right, of the creameries which takes into consideration the 
sanitation of the plant and the condition of the milk and its- 
delivery to the consumer in its normal and legal condition, and 
I think this is one of the reasons why the practice of skimming 
has been done away with. In my opinion, cream would separate 
more quickly from milk if it had once been separated by a sepa- 
rator and then re-united. I would not consider that this would 
lessen the value or change the value of the milk in any way for 
human food because the very slightest agitation would re-incor- 
porate the cream with the other solids of the milk. At one time, 
some years ago, the Howell people in Lowville carried a quantity 
of cream all summer, but I understand that the results were so 
very unsatisfactory, and I know they kept their churns running 
in the fall and they churned cream not of the best quality for 
a good many days, and I have never known of that practice being 
followed. If milk is bacteriologically clean — if it is free from 
germ life — it can be put into a bottle and immersed in ice 
w^ater and kept a long time. 

Q. Have you any remedy to suggest for the present situation 
in w^hich the producer finds itself, selling milk at cost, so that 
the producer realizes a fair profit for his milk and at the same 
time the consumers get a good article at a reasonable price ? A. 
By putting every cow on her ability to make milk at a profit in 
the hands of the owner. 

I mean if it cost 4c. a quart with the cows in a certain dairy 
and a man cannot get 5c., I could go out of business. If he 
could produce it for 3c. he could sell it for S^c. I think that is 
the solution — the placing of every cow upon her ability in the 
hands of the owner to produce milk at a profit. That would 
probably decrease the number of cows. It would seem to me 
that the transportation of milk at 32c. a can is out of proportion 
to the first cost of the milk. ISTow, we are getting $1.80 a hundred 
jx)unds and it cost 32c. to produce $1.80' worth. E^ow in the sum- 
mer time the price would be very much lower, so that it will cost 
between ^ and -J of the first cost of the commodity in the country 
to transport it to Xew York. It seems to me that it is out of 
proportion to the cost of material based on the cost of transport- 



04: [Senate 

ing them. Milk is chea^Der than meat but higher than wheat 
and corn products. A quart of milk at 15c. a quart at 4 per cent, 
butter fat, with the attendant solids would furnish as much di- 
gestible nutrition, as beef-steak would furnish at 18c. That would 
be 3c. in favor of milk and milk is very much cheaper now. On 
an average, I would say that milk is more expensive than the 
average food product. 

(Later he changes his testimony and says:) 

I would not think it was more expensive at 9c. a quart to the 
consumer in 'New York city than other food products. In my 
section and all through northern ^ew York, cheese factories and 
butter factories furnish competition for the milk dealer. The 
shijDment of milk to !N"ew York does not represent the same per- 
centage of the total production of milk that it doesi in the older 
shipping sections. The cheese factories are called co-operative 
institutions, but in the real senese of being co-operative institu- 
tions, there are not many of them. They are owned by an in- 
dividual and he takes the milk on commission and makes it for so 
much per hundred pounds of product. Very few farmers in 
northern New York own any portion of the factory. 

Almok R. Eastmait: 

I own two farms in the neighborhood of Deansville, New York, 
and let both out to tenants, but suppose I am a farmer as that is 
the only business that I have had for thirty-five or forty years. 
I have dairies upon both farms. I have no figures to base an 
opinion on as to what it would cost to produce a quart of milk. 
There are so many contingencies, differences, etc., that must be 
figured in. I would say that 4c. is nearer right than 3c. You 
must take into consideration the loss of cows through sickness, 
etc., and labor, buying utensils, and repairs upon buildings hous- 
ing the cows. From one farm the milk went to a condensorv at 
Deansville, ITew York, a distance of about four or five miles. I 
think it was called the International. There are no other creani^ 
eries near. Borden's is at Waterville, and there is a shipping 
station at !North Brookfield called the High Ground Dairy Com- 
pany, both of which are accessible to one farm. I think the High 
Ground Dairy Company is a Brooklyn concern as I know that 



'No. 45.] 65 

during the panic in Brooklyn it was some months before they 
were able to pay any money. I do not know whether I sold the 
milk to Borden's at exchange prices. I have no information on 
that. I signed a contract when I sold my milk, but it was not 
as long as the contract with Borden's; that is, when the contract 
was made I was in Europe and the man on the farm signed a 
contract. Borden's make their prices six months in advance, but 
I have not kept tract of the Exchange prices. I have talked with 
my men on the farm and they said if they could get on an 
average of from 4^c. to 4ic. there would be a little profit in it 
for them, that is, over and above the expenses. But I do not 
think they would come out even if they figured it right dovm. 
The general opinion in my vicinity is that milk is at present 
being sold a little below cost price, with the feeds and the labor 
question, the latter of which is a difficult one. We dare not 
trust ordinary helpers on the farm to go in and feed and take 
care of the dairies. 

Q. Have you any comment to make on the situation where 
a farmer, a producer, is only paid on an average throughout the 
year of about three and a third cents for producing milk, going 
through all the various forms of work and expenditures neces- 
sary to produce the milk, and that the middle man who merely 
transports that milk from the producer to the consumer gets five 
and two-thirds cents a quart ? A. Why the only comment is that 
it seems as though there ought to be in some way a more equal 
division. Whether it is possible or not to do that, I don't know. 
Of course I have no idea of what it costs to transport milk to 
I^ew York, nor the expenses that the shipping stations of Borden's 
are under; I have no knowledge of that; I only know that pro- 
ducers are not getting any profit out of it. That is, when you 
figure profit as it should be figured. 

I have no suggestions to make as to how the situation can be 
remedied. It looks to me as if there was a tacit understanding 
among the dealers to fix and control the price to be paid by 
producers. ISlj knowledge comes exclusively from reading the 
pai)ers and conversations I have had. I see the quotation of the 
Exchange prices and the prices that are paid by the Borden's and 
they run very closely together. I have no knowledge of a com- 



66 [Sek'ate 

bination existing in 'New York city ampng the dealers to raise 
the price of milk from eight to nine cents about ^November 1, 
1909j but I simply read that the price had been raised, which 
seemed a little singular that it should be soi soon after the price 
had been fixed to the producer. It looked as though the producer 
was getting quite his share of it; but, of course, we have no rer 
course. I never heard any conversation among dealers prior to 
November 1, 1909, in which the;y referreid to the necessity or 
advisability of raising the price. I cannot answer as to whether 
the Consolidated Milk Exchange is beneficial or otherwise to the 
producer. I have never known any of its members. If I became 
dissatisfied with the price that Borden's ofiPered me I suppose 1 
would have to make it into butter, as we have nO' factory where 
we could go to. I have no personal knowledge that the owners of 
creameries separate cream from, the milk and then reunite enough 
cream with the milk so that it has 3 per cent, butter fat and 
thereby save the excess of cream. I do' not know how long the 
creameries keep milk or cream. I have no commLent tO' make on 
the size of the freight rate at the present time for milk in the freight 
zone. It looks, though, the freight rate, the amount that they get 
from eiach carload of milk, was more in proportion to' what it is 
of other' freight. O course, I have no knowledge; of the expense 
of running trains and I should not want to^ criticize them. I 
have felt that in many respects the Borden people have done a 
grand good thing for the dairymen in those districts where they 
have located. They are entitled to a good deal of credit for many 
things for they have compelled the dairymen to adopt much 
better methods in the care and cleanliness of the handling of their 
milk. It has seemed a little arbitrary but nevertheless it has been 
really a good thing and beneficial for the dairymen who made the 
changes so far as that is concerned. Of course, those changes 
and that work which they have done has added in the expense, 
and it ought to have added a little more tO' the price of milk to 
meet those various expenses to the producer. 

George H. Greaves : 

I reside at Whitney's- Point, New York, about 250- miles from 
New York, in Broome county, and have^ been a farmer nearly all 
my life. I am running two farms at the present time. The fig- 



l^o. 45.] 67 

ures that I have prepared relate to only one farm. I have about 
thirty milking cows. I carry about thirty-eight cows in order to 
have thirty for milk. I produced about 58,400' quarts of milk 
during the year 1909. The total cost of production was about 
$1,752. Items entering into the costs were price of cow, keeping, 
care and feed, labor, milking, delivering milk toi station, cost, 
care and construction of utensils, interest on investment and de- 
preciation. Cost of cow $75 to $100, keeping, care and feed $65, 
labor, milking and delivering milk $12.50, care and construction 
of utensils $2.50, interest on investment and depreciatiou $10l I 
average what it costs a quart to make this milk. I calculate fifty 
tons of hay at $15 a ton, making $750, $600 for feed, $400 for 
hired help, that makes a total of $1,752. I reckon the cost of pro- 
duction of a quart of milk during that year was about 3c. The 
average production of better class of dairy cows will not exceed- 
6,000 pounds or 3,000 quarts of milk per year, which at 3c. a 
quart would be $90, just covering the cost of production. I would 
consider Ic. a reasonable profit on a quart. I think that I should 
get on an average of 4c. a quart to make a reasonable profit. At 
the present time I sell my milk to the Page Creamery Coinpany, 
and until Bordens came there they took the milk at the ^ew York 
Milk Exchange price. Previous to that I sold at the Milk Ex- 
change price. The price of the milk produced in the State of 
l^ew York that is not sold on Borden's contract is sold on the 
prices of the Xew York Milk Exchange at the producers shipping 
point, less one-half or one-quarter of a cent a quart, as a person 
can make his contract. If the milk is shipped from the 32c. zoue, 
30c. for freight, 5c. for ferriage, 20c. or 10c. per cau for hand- 
ling at the station for each forty quart can, and the farmer gets 
what is left ; for instance, the present price of the 'N^ew York Milk 
Exchange is $2.01. We are in a 32c. zone, therefore they deduct 
37c. and 20c. for handling, making 57c. and the farmer gets 
$1.44 or $1.54 per can, and then this they would call the price 
which is posted at the station where the milk is delivered as the 
'New York Milk Exchange price. The Exchange changes the 
price and the price is posted at the station. I think the majority 
or nearly all milk is sold at either Borden's or Milk Exchange 
prices. About one^half as much again is sold at Exchange as is 



68 [Senate 

sold at Borden's j^rice. In other woTds, about one-third to two- 
thirds. Previous to Borden's coming in there, they came in there 
.and restricteid us on what^ we would feed, then this other party 
^ave us the same as the BoTden's w^ithout any conditions in, less 
4c. That is the way we get our price now. By the otheir party I 
moan the Page Creamery Company. When I made a contract 
with the. dealer to sell to him at Exchange prices throughout a 
certain year, I" did not have anything to say as to what prices 
the Exchange shonld establish during that year. I have one of 
the contracts here. It is based, I think, on the Exchange prices. 
I have oue thing in my mind that will lead me to believe that 
there exists, a combination among the dealers in New York city 
to fix or control the price of milk paid by them to the producer. 
The diiference in price that they pay the produceir and the differ- 
ence in price which the consumer pays would lead me to believe 
that there must be a fixed price or something similar in order to 
force this price, in other words, the little price that the farmer 
gets and the greater price that the consumer pays, there is some- 
thing wrong somev/here, whether you call it a milk trust or not, 
I am not able to say. I do not think I got as much as 34c. foT my 
milk during 1909. When the middle men get 5|c. and the 
farmer only gets 3ic., I would say that it was bankruptcy for the 
f armeT and making millionaires of the middle: men. That is the 
way it looks to me. I am speaking of my own experience. As 
far as knowing anything about the existence of a combination 
.among the dealers in 'New York to fix and control the price 
charged by them to the^ consumer, I know things in my OTvn mind 
iDut I would not feel like swearing to them. In explanation of 
little things in my mind, I would say that they are only 
things that I would gather up and put together, little threads of 
injustice done to men that have started in there and went out in 
the milk business that eventually has been run out and as you 
might say, lost everything they had. People have started in there 
and the way they have been used and treated and the w^ay that 
.the business has been run has led me to believe that there is 
something besides fair play in the milk business. In regard to 
the combination fixing the price of milk and raising it on ISTovem- 
ber 1st, there isn't anything that I coidd swear positively, only 






]Sro. 45.] 69 

that they did raise the price of milk and it was unjust and un- 
manly for them to do it, and they must, have had a combination 
in order to force the price of milk to 9c. and pay the farmer abso- 
lutely nothing. It is a hard matter to answer that when you 
really believe it and can't tell it. As a producer I did not get any 
portion of that one cent advance in price on ^N^ovember 1st. We 
never get any advance in milk ; they simply give what they have a 
mind to and we have to- take it. I am getting a fraction over 4c. 
a quart now. Witness later says: I got an advance of about ^c. 
a quart about the first of November, which has been a custom 
for several years. I consider the existence of a milk exchange 
which fixes the price of milk and carries on operations similar to- 
the Consolidated Milk Exchange detrimental to the farmer be- 
cause it establishes the price so low that the farmer cannot live 
by it. If the Exchange establishes the price for milk we have 
got to accept it or keep our milk or give it tO' Borden, about the 
same thing, though, as it has been my experience that the Borden 
price and the Milk Exchange price average throughout the year 
about the same. If the Exchange keeps on doing business this, 
way they will bankrupt the farmer ; they will have more aband- 
oned farms and depreciation of land if they still go on. Ten 
years ago I sold gluten for $10.80 a ton. To-day it is Avorth $30 
and $32 to $35 a ton. It has advanced three times what it was 
worth at that time and milk has not advanced more than a cent 
and hardly that per quart to the producer. Hired help is al- 
most double, and still milk has not advanced to correspond with 
that, and every farmer that is making milk to-day at Exchange 
price is making it at a loss unless, at the gentleman said, he has a 
family of his own that can do the work and live within his means. 
I understand that this exchange is so powerful that if we refuse 
to take its prices, we will be unable in any way to sell our milk^ 
and we have either got to take the Exchange price or Borden's, 
which is about the same as the Exchange price. The Borden's 
and the Page Creamery Company are practically the only con- 
cerns to whom I could sell milk. The Page Creamery Company 
make their prices six months ahead and they have no reason of 
knowing what the price of cheese or butter will be at that time 
and the price of milk to-day is not as high as the price of butter 



'TO [Senate 

to the producer. The Page Creamery Company previousi to 
Bordens coming in there took the Milk Exehange pricei&. E^ow 
the Bordens came there and make them six months ahead, and 
they follow the samci, only 4 cents a hundred less. I know that 
Bordens and the Page Creamery Company adtvanced and raised 
the price simultaneously on various occasions. The trouble is, 
they all work together and we cannot tell what we want to tell. 
There are no other creameries or butter. factories where I could 
deliver my or my neighbor's milk nearer than six miles 
and that is not available to me. In a way I think Bordens and 
Page Creamery Company are competitors, as they each hold out 
certain inducements to get all they can. I do' not think they 
work together to keep the price do'^^m.. I know that Borden and 
the other dairy that operates in my vicinity use a separator to 
separate' the cream from the milk. I do not know whether they 
reunite the cream with the milk or not. It might be possible, 
although it does not seem so, with the pains that they take to 
keep the cream out and the facilities they have of straining it, 
entering this separator, it doesn't seem possible that they would 
run this through for the cleanliness of the milk. It may be posr 
sible that we get a little cleaner milk. I know at the time that 
this factory was run under the system of the Milk Exchange 
prices that they did separate cream from the milk and sent ten 
or twelve cans of cream to 'New York city a day. They also sent 
milk. The creameries in my vicinity offered premiums for milk 
that had an excess of butter fat. They bought it^ on test. They 
paid higher money for it. It gives^ them more cream. They got 
moi'e cream and the State only required about 3 per cent., butter 
fat. It is my understanding that in thisi separating process the 
creameries take the excess cream and leave in the milk just, the 
3 per cent, that is required under the laws of this iS'tate. To 
sum up, I woulid state that it is my understanding that the object 
of separating the milk from the cream and then reuniting it 
would be to draw off the excess of cream over the 3 per' cent, 
butter fat. I could not swear to it. Bordens fix their price 
April and October, that is, they establish it in September and 
March and commence the 1st of October for six months and the 
1st of April for six months. That price is published broadcast, 



'No, 45.] 71 

and I know Avhat the price is going to be for six months. There 
does not seem to be a surplus of milk in the farming loealities. 
The only thing I wish to say in reference to the situation of the 
flush in ^ew York city at the present time is that they are trying 
to raise the price of milk now and that might account for the 
flush. On the other hand, the lack of it in the farming districts 
might be on account of the high price of grain, hired help, high 
l)ric'e of hay and the drought. I am informed that they have a 
way of holding over this flush of milk and' carrying it over until 
they can use it in New York city. I cannot tell how it is done, 
but I have been told that it has been done right along. I have 
been told by a milk dealer in the city of Binghamton that he 
held milk thirty days and that you couldn't tell the difference, 
in fact, I had a sample of the cream and I pronounced it A-ISTo. 1, 
and it was said to have been held thirty days. This 
man liad something put in the cream, some preser^^ative. He put 
this preservative in and also used ice. I would not say that 
milk that has been kept ten or twelve days is a proper article for 
food. I know all of our farmers are not satisfied with the Ex- 
change and Borden's prices, but they cannot ship their inilk. They 
could not sell it if they shipped it. They could not get rid of 
it because no independent dealer can sell milk in New York city. 
lie has no show of selling milk there. He couldn't, if he tried 
to. T am in freight zone 82, about two hundred and fifty miles 
from New York, or something like that. I consider the freight 
rate very high as compareid with other products shipped by rail- 
road. In my judgment railroads are anxious to obtain shipments 
of milk. They make every effort to extend their lines out to the 
milk districts. 

Bentot^ Howell: 

I reside at Goshen. I have been a farmer all my lifetime. 
I am a producer of milk. I am a member of the Consolidated 
]\rilk Exchange. I do not remember how long. I was a member 
of the old Milk Exchange Limited when it was dissolved, also 
when it started and I have been a member of the Consolidated 
since it was organized, after the old Milk Exchange Limited 
was disolved. I o^^ni one share of stock, for which I paid. I 



72 [Senate 

thought it was advisable for me to subscribe because at that time 
we thought we needed somebody to make a price for milk. As 
near as I understand it, the share of stock was simply transferred 
fromi the old Milk Exchange Limited to the share of stock in 
the Consolidated Milk Exchange. We thought at the time I 
became a stockholder in the Consolidated Milk Exchange that it 
was possible for a price to be placed upon milk by the members 
of the Consolidated Milk Exchange. We thought it advisable 
to have a price fixed by the Consolidated Milk Exchange because 
the farmers wanted to be represented in it. We wanted to send 
some one to be represented in our part. One of my neighbors 
was a member of the board of directors of the Consolidated Milk 
Exchange, Henry Young. I never attended a meeting of the di- 
rectors or stockholders of the Consolidated. The board of direc- 
tors of the Consolidated made the price for milk. If the board 
of directors of the Consolidated should raise the price of milk, the 
price to the persons to whom I sell would go up. Whatever the 
price was, we would get If they lowered the price, we would get 
that much less. I sell my milk to Rankin Quell of Brooklyn — 
about 140 quarts a day at present. When I make my agreement 
with the people in Brooklyn, it is to sell at the prices established 
by the board of directors of the Consolidated Milk Exchange. I 
have done that ever since it was organized; that is the way we 
all do in my locality, unless they sell to Borden. I understand 
that all of the producers in my locality that I know of, sell to 
the dealers in 'New York city either at the prices established by 
Bordens or at the prices established by the Consolidated Milk 
Exchange. We make our agreements the first of April and the 
first of October. It is not any benefit to me now to be a member 
of the Consolidated Milk Exchange. The way it is I am not 
any particular member. I have to hold five shares to be a direc- 
tor and I own one share, and I have to send my proxy in and 
let someone else vote it. There are not many farmers that have 
shares in the exchange. It is composed mostly of dealers. The 
farmers have sold out. I do not know the cost of producing a 
quart of milk throughout the year. I don't think there is much 
profit at the present exchange prices. Yes, I know that the 
price of milk was raised in New York city about !N'ovember first 



Xo. 45.] 73 

from 8c. to 9c., but that don't affect us any as they did not raise 
much for us. I think they did raise ^c. They raised Jc. on 
the 23d of JN'ovember. I have been selling to this concern in 
Brooklyn about three years. Previous to that I sold to A. Larson, 
Brooklyn. I learned of the advance in price on' the 23d of 
JN^ovember from the country papers. I have not received my 
money for the milk since the raise of ^c. I knew they had raised 
because I saw it in the paper. I did not receive any letter or 
conununication of any kind, but as I had contracted to receive 
exchange prices, when I saw it in the local paper, I knew that I 
would be entitled to |c. advance. Some of the farmers who 
bought stock are George Slaughter and Jim Howell. The people 
at the creamery bought this stock. It is pretty much all gathered 
in. I send my proxy once a month when they hold meetings to 
vote my stock. 

Will E. Kay : 

I reside at Herkimer, 'New York. I think mv farm is about 
224 miles from !N'ew York. I have operated a dairy farm all my 
life and for the past four or five years I have managed two farms. 
On one farm I produced 83,618 quarts of milk at a cost of about 
.03553 per quart. I figure in the items of cost of lands and build- 
ings at $12,000; thirty-five cows and five horses, $2,000; imple- 
ments, tools, etc., $1,000, making a total investment of $15,000. 
I have interest of five per cent on that, $750. Taxes, $143.18. 
Repairs to buildings, etc., $150. Horseshoeing and incidentals, 
$83.00. Eeed purchased, $518. Grass and other seeds, $44. In- 
surance $11.40. Making a total of $2,979.58. Therefore total 
cost divided by the number of quarts makes .0355 plus. I sold my 
milk in 1909 to the Mutual Milk and Cream Company. The aver- 
age price I obtained from the Mutual Milk and Cream Company 
in 1009 was, in January, 0371. February, .0371. March, .0329. 
April, .0265. May, .0223. June, .0191. July, .0223. August, 
.0224. September, .0285. October, .0382. November, .0404. 
December, .0414. Our price was governed by the Michigan Milk 
Condensing Company at Frankfort. I am unable to say whether 
that is a Borden's concern or not. I can't see how milk under 
present conditions can be purchased for less than three cents 



74 [Senate 

for six months and four cents for the other. I wish to state that 
the average price I received per quart during 1909 is .0284. 
There is no doubt but what I received less in 1909 than in 1908. 
I do not know of any reason why dealers in ]^ew York should 
raise the price of milk to the consumers in 190'9. I believe there 
is a combination to buy this milk just as cheap as they can and 
not interfere with one another and each one sell it. 

Benjamin F. Livingston : 

I reside at Chemung, IST. Y., Chemung county, about 265 miles 
from ISTew York. I operate my farm at the present time and 
have been in the farming business all my life. I operate it prin- 
cipally as a dairy farm. The average cost of producing milk in 
the year 1909 on my farm was about three and one-half cents. The 
items going to make up that three and one-half cents are feed 
and labor, and wear and tear on cattle. I didn't figure interest 
on my investment. I sell my milk at exchange prices to the 
"New York Dairy Produce Co., the president of which, John B. 
Wierk, is a member of the Consolidated Milk Exchange. I have 
delivered milk to them for ten or twelve years and my agree^ 
ment has generally been oral — xTew York Exchange price ; that 
is, the price established by the Consiolidated Milk Ex:change. All 
of the other producers in my vicinity deliver to some creamery. 
They all have the same form of contract. All sold on the ex- 
change basis except one man. There is another creamery within 
two miles, operated by Mr. Roch. He is a dealer in Brooklyn. 
Milk is sold to him at the exchange price. There is another 
one in my vicinity about six miles, the I^ewark Milk & Cream 
Co., Mr. Wm. H. Bennett. Milk is deilivered to him now this 
winter at the exchange prices. There is another creamery at 
Lockwood about seven miles from me. Milk is delivered to 
them at the exchange price. I do not know of any 
creamery in my vicinity sending milk to ]^ew York, at which 
the exchange price does not prevail. When I was dissatisfied 
with the exchange price, I went down to I^ewark and made a deal 
with a dealer. I deal in milk myself. I am a kind of a shipper. 
Two years ago, I went down and made a contract in !N^ewark for 
cream that I realized a good deal more out of my milk. I made 



:Nro. 45.] 75 

a contract with an independent dealer once to get higher than 
exchange prices for milk in the winter time abont three years 
ago. I have not tried to make any contracts within three years. 
I thought the exchange price was as good as I could get at pres- 
ent. I think the average of the exchange prices for 1909 is about 
three and one-third cents. About the same for 1908. Perhaps a 
shade higher for 1908 than for 1909. I do not think I am ob- 
taining sufficient for my milk. I ain't making a living out of it. 
I don't know of any way at the present time that I could market 
my milk in ^ew York at a higher price. In my opinion, the 
reason the farmer cannot get more than cost for his milk when 
that cost is three and one-half cents and the consumer is paying 
nine cents, is because the market is mad© by the ]N^ew York Ex- 
change and we have to accept that, otherwise quit business. I 
think there are two farmers in the exchange out of eighty mem- 
bers. I am not a member. I find out what price has been es- 
tablished by the Milk Exchange through a card which they send 
me everj^ month every time the price changes. That card is sent 
by the " Milk Reporter." I subscribe to the '' Milk Reporter '^ 
and pay twenty-five cents additional for this postal card service. 
For the last ten years. I have no doubt but what the New York 
Exchange controls the situation to such an extent that they can 
fix most any price that they please and the farmer has to take 
that price. I don't think that it is a fair proposition for a num- 
ber of dealers to get together to fix a price of milk to the pro- 
ducer when their interest is altogether adverse to the producer 
and their interest is to buy milk as cheaply as possible. The 
Board of Directors of the Consolidated Milk Exchange claim to 
me that they &x a price for milk on the supply and demand. I 
don't know as that claim is justified altogether. I was talking 
with IVIr. Wierk some time in the fall about the price of milk. 
He said that he could not live; that he would have to raise the 
price. He said they could not make any money at eight cents a 
quart. They would have to raise it. He said if Borden did, 
the rest of them would. I think this conversation was in Sep- 
tember. He said the majority of the dealers in the city were 
going to see what Borden did and if Borden raised the price, 
they would all raise the price. I do not consider the Consolidated 



76 [Senate 

Milk Exchange as it is at present constituted, beneficial to the 
producer. I think they take advantage in establishing prices. 
ThCij lower th© price sometimes where there is no reason for it. 
In the summer time, we don't realize anything out of the milk. 
Milk is always worth more than two cents a quart and no farmer 
can make milk at two cents a quart. In March, April and May, 
farmers always sell their milk at a loss and in June it just about 
pays enough to milk the cows. I have known the milk to be 
separated and reunited, but it is not done at the present time. It 
has not been done within the last year. The milk in my sec- 
tion does not run a great deal over 3 per cent., as we have mostly 
Holstein bred cows. The manager of the J^ew York Produce 
Co. told me last week that they were going back to the eight- 
cent price the first of March. He said that all were going back 
to the eight-cent price. 

H. La Mott Locke, Farmer and Dealer: 

I reside near Richfield Springs, Ostego county, about 260 
miles from ^ew York. I have been interested in farming all 
my life, although I have been in a mercantile business for fifteen 
years and have also been a retailer of milk in the city of Chicago ; 
■owned a route there. My farm is operated as a dairy and hop 
farm. I should say it cost three and one quarter-cents to pro- 
duce a quart of milk during 1909. At the present time, I am 
making butter and am selling the butter to my neighbor farmers. 
The items entering into the cost of the production are the cost of 
the business, plant, and the hay, the grain, the price of labor, 
tools and the buildings, that is, the repairs to the buildings. If 
I wanted tO' make a reasonably fair profit on my milk and on 
the investment I would not supply milk at less than four cents. 
I hardly think I would at that. I don't think the profits at four 
cents would enable him to receive as^ much profit on the amount 
invested as in any other business which I know of. There are 
milk stations in my vicinity. The milk all goes to N^ew York 
at exchange price. There is somewhere between twelve or fifteen 
of these stations within the radius of fifteen or twenty miles of 
m.© ; four or five within four miles of me, and one within one and 
one^quarter miles, where I carried. All the milk that is sent to 



Iso. 45.] 77 

these stations is sold at exchange prices. All the exchange price 
that we get or know anything about what w^e are going to re^- 
ceive, is what we read through the papers and the sign they hang 
out at the door when they want to change it. This condition 
exists. The farmer takes his milk to the station and w^e get 
the amount posted on the door and that corresponds with the price 
that is established by the board of directors of the Consolidated 
Milk Exchange. Most all the papers print the exchange price^ 
I take eight or ten different papers. We never get any more than 
that price. Howard Barton & Company operate the station where 
I carried last. Borden has no stations anywhere near me. It 
is supposed by the farmers in my locality that a combination exists 
among the dealers of ISTew York city to fix or control the price 
paid to the producer for milk. They base that supposition on 
the fact that they are run by different parties and all make the 
change at the same time. As near as we know of, there are 
fifteen stations all run by different parties and all make the 
change at the same time. The stations are all o^vned by Kew 
York parties. I have understood that up to two years ago, the 
farmers who carried to the Bordens were getting a better price 
than those who got the exchange price, but for the past two years,, 
it is a supposition among the farmers that they have co-operated 
together and are keeping about even up. It is a fact that their 
prices will about average. It is my supposition that a combina- 
tion exists among the dealers of 'New York city to advance the 
price of milk one cent a bottle on ]N"ovember 1, 1909, to the 
consumer. I took my supposition from the fact that they raised 
it without any just cause, that we can see. It is not an accurate 
statement that the dealers raised this price because they had to 
pay the farmer an additional amount, for it is not. I never heard 
of any of the producers that got anything out of that one cent 
raise. When it costs a farmer three and one-quarter cents to 
produce a quart of milk and the middleman obtains five and two- 
thirds at the present price of milk for transporting that milk 
from the producers to the consumers, I should think they were 
making an exorbitant price. The difference between what they 
pay and what they are getting for it, I should think, was arbi- 
trary. I regard the existence of the Consolidated Milk Exchange 



78 [Seis-ate 

as detrimental, because thej are virtually forcing the farmer 
under tlie present conditions^ as he has no other place to carry his 
milk, thereby compelling him to take less than the amount he can 
afford for his milk. There is no other place to market it that 
I know of. It is a supposition with all farmers that it would 
be impossible to market our milk through independent dealers. 
I think the only remedy is to erect co-operative creameries. I 
never knew that a separator cleansed milk in any way until to- 
day. I have one — one of the best in the market — and I don't 
see that it cleanses it in any way. The only use I can see for a 
separator is to separate the milk from the cream, I have been 
in Borden's stations where I have carried. Previous to two years 
ago, they used the separator in order to get the amoim.t of cream 
that they wanted. Then they took the can of whole milk about 
three-fourths full, and then filled it up with skim milk in ordei 
to get the test which you speak of, that is, 3 per cent, butter 
fat. That practice is prevalent in the creameries in all stations 
that I have reference to and I have talked with most of them. 
I have been in most of them and that is the way milk is handled. 
They seek not to give the natural product to the consumers in 
'New York city, but simply to give milk that will run 3 per cent, 
butter fact in order to comply with the law. One station near me 
was taken up under this law, which you speak of and had to pay 
pretty smart money for it. My impression is that the freight 
rates charged by the railroad companies are too high. I think 
that the railroads obtain more on their milk business than for 
any other class of freight for a similar amoimt of work. The 
railroads are anxious to do this milk business. They encourage 
the opening of stations along the line of the railroad. The sta- 
tions are built through the express companies — all those that 
I speak of. I have quite an experience in regard to that. The 
man that first opened the station failed and beat the farmers out 
of about $1,000. I know I was about $70 out and I went out 
around among the patrons of that station, and I said to them, 
'' When they want to open this station again, let's make the par- 
ties who want to open it, secure it." Mr. Westcott was there 
himself, and all the farmers agreed that we would do that and 
:they put me in as spokesman, and I said to him, ^' We don't know 



]Sro. 45.] 79 

those parties which you brought up here to open the station, but 
we know the station belongs to you, and what security have we 
people got ? We will bring our milk here if you will secure us." 
He wouldn't do it, but he says, '' We have sold this station." I 
says, '"" How do we know that ? We know you built it." He 
says, ^' You can tell by going to the county clerk's office." That 
was in Herkimer county; I lived in Otsego, just below theline 
and he says, " This property is security." Well, that queerea 
the whole business. They all said they would bring the milk. 
^' That is security enough." Well, I didn't think it was true, 
so I went to the county clerk's office and I found that that was 
all a farce ; they still owned it. The express company still owned 
the station. That was Mr. Westcott. I think he was president 
of the Westcott Ex23ress Company. It is my impression he was 
the same Westcott that founded the Mutual Milk & Cream Com- 
pany. Westcott was representing the Richfield Springs branch 
of the D. L. & W. It is my impression and the farmers' all 
along the line, that Westcott built all on that line. There is a 
shortage of milk in my vicinity at the present time. The advance 
in price in New York to the consumer might account for the flush 
of milk in ISlew York. In the city of Chicago, it cost me about 
one and one-half cents a quart to deliver milk. I had a small 
route and went over a large territory. I consider that if you 
supply customers from house to house it can be done for about 
one and one-half cents a quart. One man with a horse and wagon 
can deliver about eight to ten cans, about four hundred quarts. 
I was selling dip milk. Any one that was dissatisfied with the 
exchange or the Borden prices, might have taken to the cheese 
factories, as some of the farmers did a great deal better there 
than the exchange price. The farmer should receive one cent a 
quart more in the winter than he does in the summer. There is 
just one point I wish to speak of and that is, it came up here 
about keeping the milk a long time. I^ow, I had a little experi- 
ence that comes to me, if the fellow told the truth. I had a friend 
who was a cheese maker and he asked me to test some milk he had 
in his room. Knowing that I knew something about milk, he 
asked me if that was not fresh milk and sweet. I tasted it and 
it was sweet. He said ^' That milk was put up the 4th day of 



80 [Senate 

July/' and this was along in tke middle of December. I asked 
him how he did it. He said, ^' I was sure that the milk was 
perfectly clean and sweet, and I got the animal heat out of it 
as soon as possible and I put up one-half a dozen cans in common 
fruit cans. I had it ice cold when it was put there and I sub- 
merged that in ice cold water so the air couldn't get to it and 
it has remained in that position from then until the present time/' 
and that milk was certainly sweet. The conditions in my country 
are that you must either carry to the milk factory or to the milk 
station. They won't take you back and forth as we have had con- 
siderable trouble over this. Farmers, of course, want to get all 
they can out of milk but when the cheese factory is paying better 
prices than the Cixchange prices they would fall off and carry to 
the factory and vice versa. I had a talk with one of my neigh- 
bors this summer. She said the milk factory was paying about 
forty cents to fifty cents more. I asked her why she did not 
change. She said she dare not change because the factory will 
close and then she would not have any place for her winter milk. 
She did not want to go down on her knees and ask them tO' take 
her back after leaving. Those are the conditions that confront 
us in that respect. We can change from one milk station to the 
other and they take us back. 

William A. Mather : 

I am a farmer with a farm about 170 miles from Albany. 
I have always been a farmer. I know nothing about the 
cost of producing milk but think that the average farmer 
who has produced milk as his main product is losing 
money. During five months last winter I sold my milk to 
the Rosemary Creamery at Adams. The price that the creamery 
was to pay me and to which I agreed was one-quarter cent below 
the exchange price ; the reason for the deviation from the exchange 
price was that this creamery is very anxious to get as much as 
possible and it bothers them sometimes and last winter they were 
paying quite a bit better than the prices we could get for butter 
and cheese manufactured ; and for that reason the farmers wanted 
to take advantage of that increase in price, and so the Rosemary 
people agreed to take them in at a quarter under, and we were glad 



■ 'No, 45.] 81 

to do it. From what I have read I should expect there is a coin- 
bination among the dealers in this city to fix or control the price. 
I have no accurate information as to the raise of price on I^ovem- 
her Ij 1909. I know that a separator is used altogether in my 
locality, but I do not know why they do it. I think and feel that 
the farmers who appear in this investigation and swear that they 
can make milk for three to three and one-third cents a quart when 
they don't know, are doing themselves and the milk producers in 
this State in general a great injury, because the milk buyers in 
Xew York naturally won't feel any too good-natured toward a 
farmer who tells things that they do not w^ish to be told, and if 
there ever comes a chance that they can use that testimony to beat 
the price of milk dowm, they are going to do it. I do not think 
that milk can be produced for three cents a quart with any profit. 
I think that it is important that the farmers should establish co- 
operative creameries for their own protection. As an example 
right in Adams they put up a co-operative creamery at the cost of 
$8,000, within 200 feet of the Rosemary creamery and the third, 
year the Itosemary creamery stopped and has been closed ever 
since, and every year except one we have received more money than 
the Rosemary people paid us. I certainl}' think that the farmer 
should have something to say about the price which he will get 
for his product. 

Albekt J. Moe: 

I reside in the town of Burk, Franklin county, about 270 miles 
from Albany. I am engaged principally as a farmer. I keep 
about twelve cows. I do not know how much it costs me to pro- 
duce milk. I have no idea how many quarts I produce. I have 
been sending my milk to a co-operative creamery where they make 
butter and cheese for a number of vears located in the town of 
Burk. There is a shipping station in our town. It is that of the 
Sheffield Farms. The following prices were paid by Sheffield 
Farms at that station: January, 1909, $1.75 a hundred; Febru- 
ary, $1.75; March, $1.55; April, $1.20; May, $1.05; June, $1 ; 
July, $1.25; August, $1.35; September, $1.35; October, $1.75; 
iN'ovember, $1.80; December, $1.90; and the present month they 
are paying $1.90. I understand that these prices are a little over 
Borden's price, but some months we beat the co-operative price 



82 , [Senate 

and other months they beat us. This milk shipping in our county 
is a new thing. It has only been in existence a little over a year. 
Only five stations, and one or two of them just started this winter, 
and there is only a very little milk shipped from our town. The 
people prefer the factories ; that is, having the milk worked up 
into butter and cheese rather than to sell to the stations. I know 
nothing of the operations of the Consolidated Milk Exchange. 

Charles F. Moueten: 

I reside in Cuba, Allegany county, and have been a farmer for 
about fifty years. My farm is operated almost exclusively as a 
dairy farm, and during the year 1909 I produced 90,000 quarts of 
milk, which cost to produce $2,890. The items entered into the 
cost of production are : interest on the investment, help, wear and 
tear of tools, taxes, rent and feed. The amount of interest on the 
investment was 5 per cent, on $12,000 or $600; help, $1,440; wear 
and tear, $200; taxes and rent, $150; feed, $500; latter not being 
total amount of feed but only that purchased outside ; the help that 
I employed on the farm produces the balance of the feed taken in 
connection with the farm, making a total of $2,890, making the 
average cost of production of a quart of milk during the year 
1909 three and two-tenths cents. I think if I received three and 
seven-tenths cents per quart I would be making a reasonable re- 
turn on my investment. If I eliminated the 5 per cent, which I 
allowed on my investment, I think in order to make a reasonable 
profit and to cover that item and profit besides, I would have to 
sell milk at four cents. I retail the most of my milk around town, 
but have, until recently, sold my surplus to the Howell Condensed 
Milk Co. of 'New Jersey. I had no written contract, but they 
agreed verbally to pay the price that would be j)^'^t out on the 
board. I get my knowledge of the exchange prices from the 
^' Orange County Farmer," a paper published dow^n in ^ew York. 
I have compared the prices quoted as exchange prices in the 
" Orange County Farmer," with the prices which I received from 
the Howell people and they were not always the same. Mr. 
Knapp, who represented the Howell people, told me that they 
would follow the exchange price. So far as I know, all shipments 
from the creameries in my county are made to New York, and it 
was a general understanding that our creameries would pay pro- 



JS'o. 45.] 83 

ducers the jDrices fixed by the Consolidated Milk Exchange. 
Howell Bros, are shipping about one hundred cans, which is a third 
what they were shipping last year, due to the competition of the 
cheese factories. During the year 1909, I obtained the following 
prices for a -iO-quart can: January, $1.70; February, $1.53 and 
$1.11 ; March, $1.41 ; April, $1.23 and $1.17 ; May, $1 ; June, $1 ; 
July, $1; August, $1.25 and $1.40; September, $1.50; October, 
$1.50; November, $1.75 ; December, $1.75. The reason that I am 
led to believe that there exists a combination among milk dealers in 
New York city to fix and control the price of milk paid by them to 
producers, is the fact that I had dealings with a milk dealer in New 
York. His name was Knapp. I think he lived in Goshen about 
three years ago. The only other reason is the fact that the price of 
milk has been arbitrarily raised at times when there were no nat- 
ural causes that w^ould warrant such raise, or depreciate it, either 
way. That would seem to me to indicate that there was. I 
mean that the price to the producer has been arbitrarily fixed. I 
believe that there is a combination which raised the price from 
eight to nine cents about November 1, 1909, because they pay us 
in the neighborhood of three cents or a little better and sell at nine 
cents, therefore it would seem there was an understanding. I 
should judge that this milk exchange would be detrimental from 
the fact that any combination that will arbitrarily fix the price of 
any product is detrimental, shutting out competition. In my re- 
tailing business I find that it costs about two cents a quart to de- 
liver milk in my own town. When I sell milk at six cents a quart in 
my town, I realize a profit, as the production and delivery is about 
five and two-tenths cents per quart. There is strong competition 
here between cheese factories and the milk dealers. The farmers 
in this section consider a dollar at the factory as good as $1.20 de- 
livered at the station. The twenty cents difference is due to the 
ten cents charge to deliver to the station and the ten cents which 
we consider whey worth. In April, the average price w^as $1.38 
per hundred pounds; May, $1.09; June, $1.15; July, $1.18; 
August, $1.32; September, $1.41; October $1.60; November, 
$1.56; December, $1.66, being the twenty cents, which is a better 
price than the exchange. There is no condition that I know of 
that would entitle the dealer to charge the consumer nine cents 



84 [Senate 

instead of eight cents in 'New York city. The statement that the 
milk dealers had to pay the farmer a higher price and therefore 
mnst increase the price from eight to nine cents a quart for a bottle 
of milk in New York city, is not based on fact and my information 
in regard to the truth of that statement is all to the contrary. I 
think the price of cheese was abont six or seven cents a pound ten 
or fifteen years ago, and it is about fifteen or sixteen cents now, 
that is, the price that the farmer gets for it. It takes between four 
and five quarts of milk to make a pound of cheese. At certain 
times of the year it takes nine to eleven pounds of milk to make a 
pound of cheese. It is true that prior to the organization of the 
Consolidated Milk Exchange the farmers lost large sums of 
money by reason of their dealing with irresponsible men and their 
inability to find a dealer in ISTew York that was responsible. I 
have observed that there is a relation between the rise and fall in 
milk in the butter and cheese prices and the rise and fall in milk. 
The prices that I quoted on cheese are for full cream cheese. 

Andrew J. ISTicoli. : 

I reside at Delhi, Delaware county, New York, and am engaged 
as a dairyman and have been for twenty years. It is operated 
exclusively as a dairy farm. I produced about 80,000 quarts 
of milk in the year 1909. I had at different times thirty-seven 
cows. We calculate to milk not less than twenty-five cows at 
a time. My farm is about two hundred miles from New York. 
The total cost of producing the 80,000 quarts in 190'9 was approx- 
imately $2,400. I figured in as items of cost, feed, labor, inter- 
est, taxes and depreciation as follows: $l,100i for feed; $700 for 
labor; $500 for interest on investment, taxes and insurance; and 
$100, depreciation. I have not considered' the value of my 
services nor that of my w^ife's, who helps on the farm. I con- 
sider the coist of producing a quart about 3 cents. That was 
leaving out the value of our services. I should say that the pro- 
ducer w^ould realize a fair profit if he got 4 cents a quart for 
his milk. I retail my milk in the town. The Delhi lOonoperative 
Dairy Company, the Eorden Conelensed Milk Company and the 
Sanford Creamery, the latter of w^hich is idle, are in my vicin- 
ity. Leaving out of the question the premium that Bordens pay 
for milk that has an excess of butter fat in it, they pay the usual 



A^o. -io.] 85 

Boi'dens prices. The Co-operative Creamery make their milk 
largely into butter and ship it to Philadelphia. It is paid for 
on the ]>rice that they receive for the product of butter, cream, 
milkj casein and milk sugar. For the war 1907 they received 
10,915,995 quarts and paid an average of 3.45 cents a quart. In 
the year 190i8 they received 8,9'G8,480 quarts and paid an aver- 
age of 3.3 cents per quart. In 1909 they received 10,336,402' 
quarts and paid at the rate of 3.0 cents per quart. That was 
the Delhi Co-operative Dairy Company. When the Sanford 
Creamery was in operation, he bought, I think, on the Exchange 
prices. The farmers established this Delhi Co-operative Dairy 
Company for the purpose of competing with the others. They 
thought the price would be better than Bordens were paying. 
Bordens have now about met that price. I cannot say whether 
the Bordens pay the additional premium because the Delhi Co- 
operati^'e Creamery is in existence. They pay the same price at 
]31oomyille, Hamden and Walton that they do at Delhi. I under- 
stand that Sanford is a member of the Consolidated Milk Ex- 
chano'e. The only reason that I am led to believe that there is a 

O -J 

combination among the dealers in ]N^ew York city to fix the price 
paid to producers is that they appear to be driving out the compe- 
tition in the country. It Avould be my opinion that the raise of 
price from 8 cents to 9 cents on November 1, 1909, was the result 
of coucurrent action by the various luilk dealers. In my o^vn 
town it would cost about two cents a quart to deliver milk. I 
don't know how much it would cost in Xew York city. 

Edwaed X. Paekiis^son: 

I reside in Albany and have been a farmer with a farm in 
Pennsylvania, sixteen miles from Philadelphia. I have not been 
on the farm for several years. I am a consulting agriculturist. 
I studied at Amherst, Massachusetts, Agricultural College. I 
have had five years of fanniug and was oue of the editors of the 
" Country Gentleman " for two years. The figures that I have 
cover every cost which would go into any business of manufac- 
turiug milk. They include the capital inyested, the taxes, depre- 
ciatiou, value of cows, taxes on cows, depreciation of cows, valut 
of tools, and evervthina: that euters into the cost of milk and all 



86 ['Senate 

details, salt, soap and ever^^thing. These figures will show the 
cost of milk froim 6,000 pounds per year up to 8,000. To begin 
with 6,000 pounds, it amounts to 5.28 cents a quart to produce 
milk; 6,500 is the average which farmers produce throughout a 
year per cow. The average farmers produce eight quarts a day 
the year round per cow. It costs 4.79 cents per quart to produce 
milk in a farm in a decent business-like way, with sanitary stables 
and good pure milk. If you get up to 9,000 pounds, that is 
higher milk production. You get milk cheaper. You get down 
to about three and a half cents. On takir?^ eight quarts a, day 
as an average per year throughout the country, it costs 5.'2i8 cents 
a quart to produce that milk at the present price of grain. My 
figures are based on a twenty-cow dairy per coav share. A build- 
ing for a twenty-cow dairy costs you $1,50'0 which is a very mod- 
erate cost for a building which includes the storing of the food. 
Per cow share is $75. The interest, taxes, depreciation, repairs 
and insurance ar^ estimated at 10 per cent, which is a fair value, 
that is' $7.50 per year for that cow. The value of a cow is giveiii 
at $75. Cannot get a good cow for less. Interest and taxes on 
a cow at 6 per cent, amount to $4.50 a year. There is a depre- 
ciation of 20i per cent. Cow's life in a dairy is about four to 
six years. At the end of that time they bring about $15 a piece. 
The value of grainery tools per cow is 80' cents, and the interest 
and depreciation on that, 15 per cent., is 12 cents which should 
be added. I have now the value of barn tools per cow, $2.28. 
This is farm scales, shovels, fork, trucks for grain, manure, 
etc., and the interest and depreciation on this sum at 15 per cent, 
is 84 cents. The value of the dairy implements per cow is $3.2i5. 
This includes milk scales, pails^ Babcock tester, strainer, hot- 
water heater, cleaning brushes, etc. Interest and depreciation at 
15 per cent, amount to 50 cents. The value of perishable tools, 
such as currying brushes, recording sheets, soap, salt, ice, bedding 
and everything amounts to $11.86. The value of food consumed 
for the cow, forty ponnds of ensilage daily, $4.50 a ton. While 
that might be a little too much, personally I could figure down 
to $3.50 a ton, depending on the kind of land. That amounts 
to $20.16. Twelve pounds of hay daily for 224 days at $17 a 
ton is $22.55. Eight pounds of grain for 224 days at $32- a ton, 



:N'o. 45.] 87 

$28.07, making a total for food, $71.68. The twenty weeks of 
pasture at 30 cents a week, I think that is a fair estimate, 
amounts to a total of $20.93, making a total, including the labor 
for handling and milking one cow, $30, cost of milk, $162. 43. 
Credit against that, manure, $20, one calf a year valued at $2, 
making a total cost of $140.43 for milk. The figures handed in 
by Mr. Parkinson show as follows, running under' the above 
schedule of costs for 6,000 pounds of milk: 

6,220' joounds of milk can be produced at $4.79; 
7,000' pounds of milk can be produced at $4.53 ; 
7,500 pounds of milk can be produced at $4.22 ; 
8,000 pounds of milk can be produced at $3.96. 

I have obtained these figures from diiferent farmerrs, asking 
them the cost of building, grain, etc., and have consulted' the sta- 
tistics of agricultural colleges. Grain has gone up more than 25 
per cent, in the last ten years. I think the price of milk is arbi- 
trary as far as I can make out from seeing here. If you go down 
to the ^' Country Gentleman's " office and look over the reco^rds 
of the association for the last ten years, you will find that it varies 
very little, almost nothing at all. For six months it is that price 
and six months it is the other price. Pasture milk is supposed to 
be cheaper, as in the winter they raise it on account of the cows 
having to be fed. I do not know, but I think the prices between 
the Exchange and Bordens run about the same. I think they 
practically mean to have them about as near together as possible. 

John S. Petteys: 

I reside at Greenwich, Washington county. New York. Have 
been a farmer practically all my life. I am situated about one 
hundred and eighty-six miles from New York. In 1908 I pro- 
duce about seventy thousand pounds of milk, about thirty-five 
thousand quarts. Average about thirteen or fourteen cows. I 
would think it cost about three or three and one-half cents to 
produce a quart of milk during the year 1909 or 1908. I think 
the farmer ought to get about three and on-half or four cents in 
order to realize a fair profit. I sold my milk to Daniel Whiting 
& Sons of Boston during the past year. I had no agreement 



88 • [Senate 

with them and I sold at either exchange or Borden's prices, but 
approximatelj the exchange price. They usually gave out a state- 
ment of the prices about, fifteen days before the ensuing month. 
I get my knowledge of the consolidated prices from the agTicul- 
tural papers. I have never sold milk to any one who shipped 
milk to I^ew York. I know nothing about the Consolidated Milk 
Exchange. Last September I was a juror on a case against the 
Montgomery Creamery Company. They were charged with sepa- 
rating milk and shipping skimmed milk to IsTew York, sixty-eight 
cans I think, and sold it as whole milk. That happened some 
years prei^dous to this time. We brought in a verdict of $6,000 
against Montgomery. Trial was held at Salem, Washington 
county. The milk was separated with a separator. As I under- 
stand it, they skimmed a certain portion of the milk and then 
saved the cream and mixed the skim milk with some whole milk 
that they had. I understand this skimming of milk had taken 
place two or three years previous to the trial. 

William P. Eichaedson: 

I reside at Goshen and have been a farmer for about thirty 
years. I was presidential elector in 1888 and State Senator in 
1890. I remember the Milk Exchange Limited and had deal- 
ings with it. Erom my dealings with the Milk Exchange 
Limited, I would say the nature of the business that they carried 
on at that time, was as follows : I attended one meeting I re- 
member quiet distinctly. I was president of the Earmers' Or- 
ganization of Orange county and we were endeavoring tO' get a 
better price for milk. Einally I was delegated to meet with the 
Milk Exchange and see what could be done, which I did; pre- 
sented our side of the case to the^m, cost of feed, etc. They did 
not sympathize much with my suggeistion. Einally concluded 
that they would take it up in executive session. I had not been 
out of the room five minutes before they made the price for the 
next month — exactly what we didn't want. When we made 
this effort to obtain this price, as I stated, I was delegated to at- 
tend the meeting. They decided, so I have understood, unan- 
imously not to make the price we had asked for. The result 
was the calling of a meeting at the courthouse in Goshen, a mass 



:N"o. 45.] 89 

meeting of the farms, at which meeting it was decided that un- 
less we could obtain the price that we felt we were entitled to, 
to stop our milk, which we did. It was such a serious stoppage 
that the next morning the president of the Milk Exchange came 
to Goshen to see me and asked me if I would be kind enough to 
name a committee to meet with the Exchange Limited. It was 
called ^^ Limited '' in those days ; it has been unlimited ever since. 
At that meeting we were in session all day. We finally agreed 
upon a set of prices for the year which aggregated forty for the 
year; the prices agreed upon at this conference were maintained 
for about a year and a half. They went through the first year 
all right, they recognized, and milk was bought and sold upon 
our agreement. The next year they formed what was called 
a joint price coimmittee and I was made chairman of that com- 
mittee and the price was made, but during the second year the 
dealers sent back so far into the country for milk that they over- 
whelmed us with cheap milk — back in the butter and cheese dis- 
tricts. They broke our prices down, and we were unable to main- 
tain them afterwards. That was the history down to that time 
and the result of my conference with the Board of Directors of 
the Milk Exchange. The Milk Exchange made a proposition that 
some of the farmers join and they elected directors of the Milk 
Exchange. I made a proposition to them that if they meant to do 
what was fair and right, that they give us equal representation 
on the board and if the board of directors could not agree that 
we leave it to a referee, but they ridiculed that idea and I am 
sorry to say that some of our farmers were foolish enough to be 
drawn into the proposition of going onto the board of directors 
when they have about as much to say about the price of milk 
as that has, just about. It is a simple fact and I cannot under- 
stand why any one tries to get away from it that the prices made 
by the !Milk Exchange are the guide, absolutely the guide. I do 
know that it is and has been for years the guide throughout the 
country, either the exchange or Borden's. I don't know of any 
difference in the method of the Consolidated Milk Exchange 
carrying on its business or fixing the value of milk than that used 
by the Milk Exchange Limited. As to the age of milk when it 



90 [Senate 

gets into 'N&w York: Sunday night's milk, if it isn't more than 
forty miles from here, gets in here Tuesday morning. And you 
take the milk train that starts back in this outside territory where 
the dealers go for milk clear back into the interior, Pennsylvania 
and I^ew Jersey and up in Vermont and off in these different 
directions where they start the milk train at six o'clock in the 
morning and that milk is in transit until eleven or twelve o'clock 
the next night getting into iTew YoTk. Therefore you can see 
that it is Tuesday morning before it is distributed here; ab- 
solutely wrong — no occasion for it. Milk begins to deteriorate 
in less time than forty-eight hours. I think the situation could 
be remedied. It could be done if the railroads would join. 
Couldn't do it with the dealers because they are not in sympathy 
with the idea ; they would not put it into practice for the reason it 
would compel them to pay better prices and more regular prices 
to the farmers. But if the railroads would make rates according 
to the distance they haul, if they have got a short haul, make 
the rate for a short haul, and then join in trains, regulate their 
trains so that the milk — well, I might say that some years 
ago I went to Samuel Felton, vice-president of the Erie rail- 
road, and made a proposition to him to have milk shipped as 
quickly as possible; have the morning milk come down on the 
Orange County Express, lead a car at Goshen; I agreed to have 
that car loaded with morning's milk. That milk, if it came down 
on the C'range County, would have been delivered here in l^ew 
York, the same morning's milk, at 10' o'clock, 11 o'clock possibly; 
shortly after the arrival of the train. ISTow, he took that idea 
up and was very favorable to it, and if Mr. Felton had remained 
with the Erie railroad it would have been put into operation, been 
tested so that we would have tried it and see how it worked out. 
But he went with the Queen & Crescent I think it was, and some- 
body came in and didn't understand the situation and so it went. 
'Now, the trouble is that the D., L. & W., the O. & W. 
and when Westcott was alive, the New York Central 
railroads, the railroads that have got the long haul, wanted to 
keep the milk business because it is the best paying trains they 
have got on the road, even that any passenger trains that they 
have had or any other kind of freight ; they want that business ; 



'No. 45.] 91 

thej had an agent in chairge of that department with the Erie who 
was very much afraid that if they got into a wrangle with the 
other milk agents of the railroads, and the fact that the others 
were a little bit smart for the Erie man and they threatened 
him that if they put the price down for the nearby territory 
that they would put it down all along the line anyway and the 
result was that the Erie lost all its nearby business. The other 
roads built up a business ; take the Ontario & Western, didn't 
have anything. They are shipping more to-day than the Erie. 
The Delaware, Lackawanna & Western didn't have anything until 
Mir. Westcott took hold of it, and the Erie was compelled to go 
and build ice houses and p'O' wav out bevond their natural terri- 
tory in order to keep from breaking its price of freight rates, 
and in the suit by the dealer that they had exhausted the nearby 
territory, I told Mr. Feltou that if he would put that idea into 
operation I would agree within twenty-four hours to give him 
every can of milk west of Port Jervis that he was getting before 
and agree for each of the counties to double the supply of milk 
in Orange county. Until something is done, the people of New 
York city will use milk which has deteriorated by age. They 
do not get a satisfactory article, and this wrangle will be con- 
tinuous. There is an improved condition here in ^ew York city 
that has changed by time to a certain extent. I say it has im- 
proved because it makes fewer jDeople to deal with, and that is a 
consolidation of the smaller concerns into, for instance, take the 
Sheffield farms that have been buying up, Beakes has been buying, 
and there is the Mutual, the Empire, all these other concerns been 
buying, the McDermott have been buying a lot and they have got 
a lot of the smaller ones out of the way. The exchange price is 
published in all our papers. In my vicinity, contracts for the 
sale of milk at exchange prices are ordinarily made on the first 
of April and the first of October. There is a good deal of milk 
that is sold now by the month — not under contract so much. I 
should say there are eight or ten creameries within deliverable 
distance from my house and everyone of them except Bordens 
now buys on exchange prices. I do not know exactly how much 
it costs to produce a quart of milk but I do not believe that a 
man to-day, with the present cost of feed and labor, can produce 



92 [Senate 

milk for much less tlian three, four and five. I mean three cents 
for four months, four cents for four months and five cents for 
four months. As to knowing whether there exists any combina- 
tion among the dealers in New York city to fix the price of milk 
paid by them to the producer, I do not know to the extent of 
being present at any joint meeting" where a discussion of that 
kind took place. I do know what the feeling is ^nd has existed 
here for a good many years among the dealers. I have argued 
with them in regard to better prices for the farmer, that they 
have got to have more money for the milk in the city, and I 
know there has been a feeling that they were going tO' do it. 
Borden's people tried one year and the others stole the trade and 
they quit and the Sheffield people got it, and this year they seem 
to have had an affinity of mind, something that has happened to 
hit it together. There is not the slightest doubt in my mind but 
what a combination exists among the dealers in ISTew York city 
to ^x the price to the producer and the producer has to take that 
price. I would suggest an equal representation on the board, of 
the milk dealers and representatives of the producers, and also 
consumers, as a substitute for the quotations now made by the 
Milk Exchange which would be more beneficial to the farmer. 1 
presume that I have seen, in my life, a thonsand times', milk 
taken from the dlifferent creameries, taken from the cold milk 
and either made into cream, either used in the manufacture of 
butter, or else it was added to other milk to bring up the standard. 
I have not been as familiar with creameries in the last few years 
as I was prior to that time. Then it was an ordinary every-day 
occurrence; I don't believe that it exists as much as it did a few 
years ago. I know that cream is kept for weeks in the summer 
time, about the early part of June. Sometimes it is 
kept as long as thirty or sixty days. I have never seen it but 
I have no doubt but what it has been kept at least thirty days. 
As to the system known as standardizing milk, that is, grading 
it to straight skimmed, 3 per cent., 3% per cent, and four per 
cent, butter fat, each package to be marked so that it can be 
easily identified, and heavy penalties imposed for any violation, 
I think that would be rather difficult to enforce. It can be done 
if you have got the machinery, no doubt about that, but do the 



iS^o. 4:5.] 93 

public know that a milk that is rich in butter fat is not as whole- 
some as a milk that is not? That is the fact. Take a Jersey, 
it is almost impossible to bring a Jersey calf up on a Jersey cow, 
on its own mother's milk. We get a hardier, better calf, to put 
him on the native cow or Holstein. I would not have this rich 
butter fat milk for my family to drink. I was thinking, when 
you first suggested it, Mr. Keferee, that perhaps the idea was 
to have high prices on the high butter fats and so on down. The 
impression I am afraid would be to the public, that in buying 
a cheaper milk in price, they would be getting a cheaper grade, 
but the public would possibly soon familiarize themselves with 
that and if they found that they could buy as much real value 
for two cents as they could buy for six cents, they would take 
the cheaper, and as an actual fact, if that situation existed and 
3 per cent, butter fat was sold to the poorer people, the poor 
people would be getting a more wholesome milk than the people 
who would pay the higher price and that would be a highly de- 
sirable result. 

Informa,tion sent in at request of Referee: 

As to graded milk, the effect of flush milk in the market, the 
long distance haul by railroads, and my explanation of the propo- 
sition originally made by the then proposed Consolidated Exchange 
for farmers to subscribe to one-half the capital stock. In answer 
to the proposition made by the Consolidated Milk Exchange to sell 
50 per cent, of their stock to the farmers and give them repre- 
sentation on the Price Making Committee would say that about 
the time of the shift from the Limited to the Consolidated !Milk 
Exchange, I made the following in lieu of the one proposed by 
them, namely that if the Exchange would incorporate in their 
by-laws that in the forming of a Price Making Committee the 
farmers should have equal representation without regard to stock 
holdings, said farmer representatives to be selected by recognized 
organization of farmers in the country producing milk, and if at 
any time this Price Making Committee, composed of equal repre- 
sentation of dealers and farmers, should fail to agree, that then 
the producers should name a referee, the milk dealers a referee, 
and if those two, composed of disinterested business men, were 



94: [Senate 

unable to agree, that the two should then select a third, and what- 
ever decision was arrived at by a majority or all of the referees 
should be accepted and abided by dealers and produceTs. My 
reason for doing this was that it was perfectly apparent to all that 
the dealers could at any time buy a few shares of stock from some 
farmer and obtain control of the Price Making Committee. So 
far as I can see the question of grading milk and putting the same 
on the basis of butter fat ranging from three to four per cent., 
would seem fair to producer and consumer, provided the enforce- 
ment of the law was done by the State through a commissioner or 
commissioners who are thoroughly familiar with the production 
of milk, the operations of the middle men and the needs of the 
consumer. I should be opposed to the sale of skim milk in Greater 
Kew York at the present time, believing it would be better to test 
the ability of a milk commission to regulate and control under the 
aforesaid proposition. I believe it would be necessary to have a 
capable, intelligent commission thoroughly understand the milk 
business, as there are periods of the year when it is necessary to 
take care of a considerable surplus of milk, who would be. able to 
suggest ways and means of obtaining the most money for this 
surplus. I would also suggest that from a hygienic, sanitary and 
healthful standpoint, that the age of milk sold in Greater I^ew 
York should not exceed twenty-four hours from producer to con- 
sumer, and that this should be regulated by statute. The present 
rate by the railroads gives a twenty-six, twenty-nine and thirty- 
two cent freight zone, and in my opinion these zones cover too 
much territory and that the prices should be readjusted and the 
prices based upon the distance of the haul rather than upon pres- 
ent arbitrary and ununiform rate per distance of haul. 

Edward B. San ford: 

I reside at Warwick, N. Y. I am a farmer and treasurer of 
the New Jersey Corporation of the Sanford Dairy Company. I 
have produced milk since 1886. The principal office of the corpo- 
ration is at 'No. 138 West Thirty-first street. The capital stock 
of the corporation is $2'Y,0'00'. We have paid one dividend about 
a year ago, 5 per eent. We have two creameries, one at Delhi, 
Delaware county, New York, which has not been operated for one 



:N'o. 45.] 95 

or two years, and one at Circleville, Orange county, New York. 
AVe also have one at Mulford, Sussex county, l^ew Jersey, and one 
at Great Meadow^s, Warren county, Xew Jersey. I was not a 
member of the Milk Exchange Limited, and I am a stockholder of 
the Consolidated Milk Exchange and was a director for about two 
years up to a year ago. I have never been an officer, director, 
stockholder or employee of Borden's Condensed Milk Company^ 
Sheffield Farms, Slasson Decker Compan}^ or the Mutual Milk and 
Cream Company. I ow^n five shares of stock in the Orange County 
Milk Association. I attended about half of the meetings while I 
was director of the Consolidated. I don't remember clearly what 
took place at the meeting. To my knowledge the Consolidated 
never dealt in milk. I used to attend directors meetings more on 
account of my real estate interests then I did in relation to milk 
business. AYe sometimes pay Exchange prices, at other times 
Borden's. We do not retail much milk, but soon after [NTovember 
first we raised the price to some of our customers to nine cents. 
Our business is mostly wholesale. Our retail business wo'uld 
probably not amount to more than $365 per year. I have no 
recollection of Gorman calling on me in reference to a campaign 
of education. My recollection is that Mr. Laemmle was the secre- 
tary of the Consolidated at the time I was a director. I should 
say that it cost from two and a half to three and a quarter cents 
to produce a quart of milk. I never separate the milk and reunite 
the skim milk to enough of the cream to make a milk that will run 
3 per cent, butter fat in order to comply with the law. I have been 
told of cases where it has been done, but not with the object you 
mentioned, but for the purpose of cleanliness. I am not a mem- 
ber of the Milk Dealers Protective Association. I do not know 
Bleffort. To get the best results by the gravity process in obtain- 
ing cream, the milk should be cooled as soon as possible and should 
not be greatly agitated. Milk which is treated this way will issue 
a more distinct line of bottled cream and milk than milk that has 
been agitated. When we have an unusual high price, then we find 
two conditions both fatal to us as dealers. One is that the high 
price to the wholesalers causes him to curtail his consumption. 
You may ask me what he does. I don't know. That has been 
asked many times. He does curtail the consumption, that I do 



96 [Senate 

know, from ten to thirty per cent, whether he iises a substitute or 
whether he shortens up the measure, I know he uses less milk. 
Also the higher price causes the producer of course to reach for it 
with cattle and feed, and before we know it we are in the con- 
dition we are today and we have a great deal more milk than we 
know what to do with. We have w^hat we term a flush. I think, 
in fact, if it were not for some very great sacrifices we are making 
in the market, we would have 50 per cent, more than we want. 
The flush that is caused by the holding back usually clears itself 
unless it is followed by a period of warm, depressing weather, 
something of that sort which also stimulates the production; any 
lowering of temperature, open winter, as it is termed, usually 
makes plenty of milk. The fact of lowering the price, among 
others, would be theoretically to diminish the supply. As a matter 
of practice that might take a little time, but in time it would be 
accomplished. 

MiETON L. Sanford : 

I reside at Warwick, ISTew York, county of Orange, about sixty- 
four miles from I^ew York, and am a farmer, producing milk 
and selling it myself in this market. I buy some milk as well 
as sell it. I have no store or oflice in ]^ew York city but have 
a creamery at Warwick. I work for the Mutual Milk and Cream 
Company part of my time. I own from fifteen to eighteen shares 
of stock in the Consolidated Milk Exchange. I once owned a 
block of 5'0 shares. I sold those. I think I acquired my last 
block of stock in 1900. I own from fifty to one hundred and fifty 
shares of stock in the Milk Exchange Limited. I have been an 
oflicer and director of the Consolidated Milk Exchange. I was a 
director of the Consolidated Exchange from its incorporation till 
October of 1906 or 1907, then I resigned. I was a director in 
the Milk Exchange Limited about two or three years before I 
went out of business. I was the first trader of the Consolidated 
Milk Exchange. Two or three weeks ago I bought a few shares 
of stock in the Mutual Milk and Cream Company but I have not 
as yet received them so I don't know whether I am a stockholder 
of record or not. The nature of my work for the Mutual Milk 
and Cream Company is selling of icehouses, repairing of conntry 



Xo. 45.] 97 

creameries, making contracts with farmers or rather, after the 
prices are handed to me, to go and meet farmers and talk it over ; 
any miscellaneous things, most anything they call on me. Some 
times I work for fifteen days steady, then I don't work for a week. 
At an early date the meetings of the board of directors of the 
Milk Exchange Limited were held at 20-22 !N'orth Moore street, 
later they were held at 6 Harrison street. Meetings of the board 
of directors of the Consolidated Milk Exchange were held at 
Jersey City, also in E^ew York at 6 Harrison street. I don't 
know as there was any difference in the nature of the business 
carried on by the Milk Exchange Limited and the Consolidated 
]\rilk Exchange. Think it was about the same. In an early day 
of the Limited Exchange, as I remember it, they took the farmers' 
milk and sold it on a commission, but never any of that was done 
after I came in the board. It was done previous to that but not 
after I came in. During the time that I was on the board of 
the Milk Exchange Limited the business transacted was very 
similar to that of the consolidated. The nature of the business 
was the finding the value of milk. In the consolidated there 
was a discussion as to the value among the different members ; 
same saw one side and some saw it another, and then they fixed 
a value. 

Q. And that took the form of a resolution that was entered 
in the board of directors minutes ? A. Why, from the price com- 
mittee, as I remember. 

When I left Borden's Mr. Laemmle was secretary. I think 
there were some members of the old Milk Exchange Limited 
board that went into the board of the Consolidated Milk Ex- 
change. I did myself. I attended a number of special meetings 
of the board of directors of the Consolidated Milk Exchange to 
consider the value of milk. The object of the exchange in fixing 
the value of milk was so that we have some way of paying our 
bills and know what they are going to be. I buy my milk at 
the exchange price. I specified in my contract when I bought 
milk on the exchange and also specified when I did not buy on 
the exchange. About twenty-five or thirty years ago men would 
come in here and you buy his milk on the Xew York market 
4 



98 [Senate 

4 

price. We had no exchange. We would inquire around wiien 
it was time to pay. The price was so and so. There was differ- 
ent people who pretended to make the price. There was no ex- 
change. We would start in and settle on that. First thing you 
would get a letter from a farmer for the difference because his 
neighbor Tom Jones got a quarter or more or half more^ and 
when these exchanges were organized I think the farmers were 
about as anxious to have them as the dealers. I handle certified 
milk. I read in the ISTew York papers and casually heard it 
talked over that the price of bottled milk was on l!^ovember 1, 
1909j raised from eight to nine cents. I heard no discussion 
among dealers previous to l^ovember 1st in reference to the raise. 
I think when I resigned in October, 1906 or 190'7j Mr. James 
A. How^ell went on the board in my place. I know nothing about 
any practice of separating cream from the milk for the purpose of 
standardizing it, making it run 3 per cent, butter fat. I don't 
know what it costs to produce a quart of milk. As to my knowl- 
edge when the Mutual Milk and Cream Company raised; its price 
of bottled milk in 'Hew York tO' nine cents a quart on I^ovember 
1st, I won't say whether it was done !N"ovember 1st or afterwards. 
They told me in the office that they had raised the price to nine 
cents a quart a few days afterwards. I don't know what day they 
did it. 

Heney Stevens: 

I reside at Lacona, Oswego county, about one hundred and fifty- 
five miles froim ISTew York. I have always been a farmer. I have 
two farms, both of which are operated as dairy farms. I have 
no figures from which I could state the cost of producing a quart 
of milk during 190i9, and do not know how much milk I produced. 
My milk as a rule goes to a co-operative cheese and butter factory. 
I used to sell it to the Mutual Milk and Cream Company, six 
miles from my farm. I think the last was a year ago last winter. 
The price was a certain amount that we agreed upon extending 
over one to three months in advance, or perhaps five months, and 
I sold this milk to these people to a certain time. I think it was 
the first of March, and at that time they wanted me to agree to 
take it two months longer until the first of May and I did not 



l^o. 45.] 99 

feel just like doing it without consulting with the patrons of the 
factory, and finally I fixed it with them, and if we decided to 
take this milk the extra two months, that they would take it and 
we were to notify them a week or two before the time expired. 
We did not make any written contract. It was all verbal and we 
sent them word when we would take it, but when the time ex- 
pired, they sent up word the same as today that tomorrow they 
did not want our milk. Then, of course, our factory man, he took 
it then and made it up ; and they have done in that same way sev- 
eral times, that is, they have gone through the country there 
when they are short of milk, and bought it for a certain length 
of time. There is a station at Lacona, what we call a milk sta- 
tion, that pays the exchange price. There is a cheese factory 
right in the same village that has made butter or shipped cream 
and made skimmed cheese, and they have been ahle the past year^ 
to pay the patrons more for milk than they could get over to the- 
station. The facts are the station has not got but a very little' 
milk except they went in the west part of tov^m, perhaps five 
miles, and contracted with a factory, all the milk that came to 
this factory until the first of December. O'utside of that they get 
very little milk from the farmers because they could not pay as 
much as these m'en that made the milk up into cheese and 
cream. I don't know as to whether there is a co'mbination or 
agTeement among the dealers of l^ew York city, and I don't know 
whether the combine did raise the price of milk the first of No- 
vember. I might have an opinion and that opinion is that they 
are a combination. I base that on the fact that they have raised 
the price about the same time. I heard no discussion among 
dealers as to raising the price prior to ITovember. They use 
the separator in my vicinity but not to reduce the milk to a 3 
per cent, butter fat standard. They separate the cream and ship 
it to I^ew York and make it into butter and make the skimmed 
milk up into cheese. I have been breeding Holsteins about thirty- 
five years and I think their milk will test on an average about 
three and seven tenths butter fat, during the season. I think if 
a producer can get from three and one-third to four cents a quart 
that he would be doing quite well. I would not expect for ship- 
ping milk and making cheese that with some of these breeds 



100 [Senate 

that give a large percentage of butter fat and a small amount of 
milk that thej could make very much money, but I think as a 
rule that if farmers could get around ;four cents a quart for their 
milk they can do better than they can in anything else. There 
is one thing now in the cost of milk. The sanitary conditions 
have got to be a great deal higher than they used to be, and that 
all makes more expense. I think there are a great many men 
sent out to inspect the plants and property that are very incom- 
petent. 

William H. Steoi^g: 

I reside at Goshen, between Goshen and Middletown,, and my 
business is farming. My farm is about sixty-three miles from 
the city. I sell my milk to Bordens and at BoTdens' price. The 
-creamery is at Middletown. I heard no discussions among any 
one connected with Bordens ot any of the dealers with reference 
:to the necessity of advisability of a raise in price from eight to 
.nine cents a quart in ^ew York city. I know of no agreement. 
Z produced 194,985 pounds of milk on my farm during the year 
1909, that would be about 95,000 quarts. The cost of prodnction 
of that milk per quart would be pretty closie to^ three and one^ 
fourth cents. Entering into the cost of production I figured mill 
feeds, hay, labor and interest on investment. At the present way 
things are we couldn't make any profit at less than three', four 
and five. In the same manner Mr. Bennett figures it. I don't 
know anything of a combination among the dealers in 'New York 
city. If I couldn't sell my milk to Bordens, I could sell it to 
the Diamond Dairy Company or the Orange C'ounty Milk Asso- 
ciation. I know of no custom in which cream is taken from the 
milk so as to make it run 3 peir cent, butter fat and save the 
excess of cream. 

Harry Vail: 

I am a farmer and reside at Millford, New York, and I have 
been in that business about ten years. I have; produced about 
80,000 pounds of milk which would be equivalent to about 
44,000 quarts. It costs me about three and two-fifths cents to 
produce a quart of milk during the year 1909. In order to 
realize a fair profit I think I would have to sell milk at about 



Xo. 45.] 101 

four cents in summer and five cents in winter, or about an aver- 
age of four and one-half cents tlie year round. I have sold my 
milk to Borden's for the last two years under contract. We have 
two prices in our country, an Exchange, and also prices made by 
Borden's, and we can take our pick. Most of the milk in my 
country is sold at either Borden's or Exchange prices. I think 
that Borden's prices and the Exchange prices average about the 
same throughout the year. During the past two or three years 
they have been about even. The average cost or production was 
about the same as the selling price, and I attribute that to the fact 
that we are at the mercy of the dealers, Borden's and the Ex- 
chang'e members, and we have got to take their prices or keep 
our milk. There are no cheese factories, creameries or butter 
factories to compete against them. When it costs 3 2/5 cents to 
jDroduce a quart of milk throughout the year and the dealers in 
Xew York city are charging 9 cents a quart, I think it is too 
much profit for the middle-man. I have fifty cows but am only 
milking twenty-one. I get 280 quarts a day from those twenty- 
one cows for six months. I have no knowledge as to the existence 
of a combination. I do not understand why the price is kept so 
low. It looks as though there should be something in order to 
get at the price, and I do not know whether the Consolidated 
Milk Exchange is beneficial to the producer. I saw a separator 
in operation, and I saw them separate the cream from the milk, 
and I saw by the tubes leading fro'm the cream vat and the milk 
vat that they reunited portions of the cream with the skim milk, 
and then this mixture connected below and ran into a tank and 
then went to the bottling table. I do not know whether they re- 
united all of the cream or simply enough to make it 3 per cent, 
butter fat. Borden's hold us strictly to all the terms of the con- 
tracts that we sign which we are willing to do if we get paid for 
the milk. My ovni cows are not flush. They are milking very 
fail-. I have known the Howells Condensed Milk Company at 
Pine Island to have several thousand cans of cream on hand 
holding them for hot weather. The practice is to make up this 
cream when the milk is flush and hold it may be two or three- 
months afterward. They keep it by burying it iii ice. It would 
look to me as though the farmer ought to get half when the con- 



102 [Senate 

STimer lias to pay 9 cents' a quart. The Exchange price for milk 
dui'ing Dec-efmber in my section was 4^4 cents, per quart. A 
quart of milk weighs 2% pounds, and if the Exchange pirioe is 
4% cents that would mean the same. Eollowing is the expense 
of my dairy for the month of .December, 1909 : 

Feed bill '. $117 64 

Labor 75 00 

^ine tons sugar beets 72 00 

Hay 112 18 

Interest, 5 per cent., on cows and barn, .i . . . 14 00 

Eour bundles of straw. .....: ■. . . . 32 

Carting milk 15 50 

Taxes on cow barns 2 17 

Total $408 81 



In return for this cost to produce I sold milk for $339.44. 

William A. Wei.ls: 

I reside at Goshen, and am cashier of a bank. I was born and 
brought up on a farm and worked on a farm until about ten years 
ago. We produced milk to sell in the 'New York market — I, in 
connection with my fathe;r. I am not in the milk business at 
present. I believe I am a stockholder in the Consolidated Milk 
Exchange. The shares came through my father. I have never 
attended any meetings of the directors or stockholders of the; Con- 
solidated J\lilk Exchange. I should think that the price was 
established or fixed by the C^onsolidated Milk Exchange and that 
the farmers in my locality expected and did get the price that 
was established. The farmers in my district sell their milk at 
either Exchange or Borden price. I do not know of any fact that 
woidd lead me to believe that there was a combination: to raise 
the j)rice of milk on or about ^N^ovember 1st. 

RUFUS WlKOFE. 

I reside a little out of Cooper stown, in Otsego county and have 
been a farmer all my life. I have two farms, one I operate my- 
self and the other I let out to tenants. I have! about thirty cows. 
During the year 190*9, from thirty cows, I produced 63,763 quarts 



Xo. -io.] 103 

of milk. It cost me about three and one-fifth, cents a quart to 
produce this milk. The items going in to make up this cost gen- 
erally, are capital, feed and labor. If the farmer sells at four 
cents a quart, he is realizing what I would regard as a reason- 
able profit. That is, average four cents throughout the year. My. 
farm is about three hundred miles from ISTew York. I think 1 
would average about fifteen milking cows during the year. My 
cows average about eleven months as milking cows. I consider 
the average cow to last about six years for milk production. Cows 
generally are supposed to be at a prime from ^ve to ten years. 
I sometimes get sixty dollars for beef cows after I am through 
milking them. A good cow about three years old. should cost 
from sixty dollars to one himdred dollars. Most of the milk in 
my country is marketed to the International Milk Produce Com- 
pany, who manufacture different kinds of cheese and they make 
ice cream in the summer. They were shut off with a little sur- 
plus they had, that is, they accumulated a little surplus and they 
thought they would start a trade in l^ew York and they estab- 
lished a little market there and put $300 in an outfit, and gave 
a man $5 a day and continued it until they lost $180 at eight 
cents a quart. That is what I was told yesterday. It cost me 
ten cents a hundred to draw my milk. The price of milk was 
first made out less ten cents. In 1908, I produced the follow- 
ing amount of milk from my farm: January, 2,687 quarts; 
February, 3,349; March, 4,576; April, 5,657; May, 8,210; June, 
10,324; July, 8,235; August, 5,308; September, 2,759; October, 
2,349; ISTovember, 1,816; December, 2,733. During 1909, the 
average price per quart I obtained for milk was $.0'2686'9. In 
1908, I obtained an average price per quart of $. 0^2 6 11 and during 
the year 1907 I produced milk as follows: January, 4,226 quarts ; 
February, 4,045; March, 5,939; April, 5,939; May, 7,278; June, 
9,080; July, 8,344"; August, 6,328; September, 3,949; October, 
2,776; :N'ovember, 1,832; December, 1,474. For this year, I re- 
ceived an average price per quart of $.026746. I have read' some- 
what of the Consolidated Milk Exchange, and it fixes the price 
that the dealers of ISTew York city pay the farmers for milk, but 
I have never taken it very seriously into consideration. Every one 
has believed that it was trying to rob the producer. It looks to us 



104 [Senate 

as if they make their prices in New York city. Most of the pro- 
ducers think that is it. I don't know abont the exchange trying 
to ^x the price to be paid by the consumers. I know in our section 
of the country there has been no combination at all to put up the 
price of milk, and our milk price is about the same as it has been. 
It does not affect us a fraction of a cent one way or the other. I 
sell to the manufacturing company that manufactures milk into 
cheese. I asked the gentleman if he couldn't pay us a little more 
since the advance in 'New York city and he said he could not, as 
their prices were not reckoned on milk, but the side produces from 
milk. It is my opinion that the Consolidated Milk Exchange, as 
it is at present constituted, is not beneficial to us, because they are 
not paying us any more for milk — no more than they have paid — 
and not anything near enough for producing milk. They say there 
were some men in my county using a separator to separate the milk 
from the cream, and after the milk was separated from the cream 
and reunited them so that the milk in the reunited product shall 
show not to exceed Z per cent, butter fat, but it was not profitable. 
They were sending 3 per cent, cream to New York and selling it 
for what they could get, making the milk or cream contain what 
the law required. No doubt that was the case, but I think there is 
very little of it going on now. There is a small Borden station at 
Elk Creek in my county. There is not a fiush of milk in my 
vicinity at the present time. I do not know that there is a fiush 
of milk in New York city from what I can find out and from what 
I have read. I think the supply and demand is pretty well 
balanced. The Board of Health in New York city are driving out 
a great many farmers from the dairy business. These farmers 
then go to the cheese factories. I don't know whether the sepa- 
rator is used for cleaning or purifying milk. I don't think it is. 
You can keep cream longer than milk by keeping it extremely 
cold, down to 40, and it doesn't do it any good if you can keep it. 
In my opinion, cream that is kept two or three months would not 
be wholesome and fresh and it would not be palatable any way. 

Hei^ry Young : 

I reside at Goshen, N. Y., and have been a farmer about twenty 
years. I am a producer of milk but have never been a dealer. I 
am a stockholder and director of the consolidated Milk Exchange 



]S^o. 45.] 105 

and have been a director about three years. I was also clerk of 
the Value Committee. I was made such about two years ao;o. I 
attended the last meeting about the 15th of December, 1909. We 
met at 'No. 6 Harrison street. Sometimes they made reports and 
sometimes they didn't at these meetings. I saw memoranda in 
regard to values lying on the table some time the last of Novem- 
ber, but I don't know what was responsible for them or who had 
charge of them. Those memoranda were ballots taken when we 
were fixing the value of milk, just say informal ballots, five, $1.25 ; 
eight, $1.10. The list of prices under the heading '' Exchange 
Prices " in the " Milk Reporter " are the same figures as the 
values arrived at by the Board of Directors. There were eighty 
members of the Association and seventeen members of the Board 
of Directors. They sent a postal card as to the value of milk to 
every subscriber of the '' Reporter." They have been sending them 
for a great many years. I sell my milk at present to a man in 
Paterson, N. J., a Mr. Brower. I have no written agreement. 
I get the market price. I expected to get the exchange price. I 
did get the exchange price — the price that was published by the 
'^ Reporter." I have been selling to this nian about six months. 
Previous to that I sold to the Orange County Milk people and prac- 
tically got the exchange price. I don't know of any agreement be- 
tween the members of the Consolidated Milk Exchange to observe 
or liver up to the price or values that were established by the Board 
of Directors. I don't know whether there was any agreement 
among the members of the Consolidated Milk Exchange ito raise 
the price of bottled milk from eight cents to nine cents a quart in 
New York city about November 1, 1909. I heard some discus- 
sion among the members of the Board of Directors — I heard 
several men say they were not getting enough and could not make 
their expenses, and if they did not get more for their milk they 
did not know what would happen. I was never present when they 
agreed to raise the price of milk at that date. I never had a con- 
versation with Mr. Schoonmaker except three years ago, and at 
that time I never conversed with him to try to establish a con- 
certed action in setting a price of milk. The last meeting of the 
Consolidated Milk Exchange Board of Directors was in the last 
of December, about the 30th. I don't think they put any value 



106 ' ~ '['S^^^^'T^ 

on milk at that time. I think they reported '' no change in value 
of milk." I don't think they passed any resolutions. That meet- 
ing was held at 'No. 6 Harrison street, and I think Mr. William B. 
Conklin was present. There were about twelve or thirteen pres- 
ent. The meeting was in IsTovember instead of December. I did 
feed, he has to own hirses,machinery, get ice, and he has to ice the 
attend a meeting in Jersey City about the middle of December. 
The committee of values did not report at that meeting. That was 
a special meeting. Mr. Laemmle was there. In the production of 
milk and finally delivering it to the creamery, a man must own 
or rent a farm, then he has to stock it, he has to employ labor to 
milk the cows twice a day, he has to cut the hay, he has to buy 
feed, he has to own horses, machinery, get ice, and he has to ice 
the milk up, keep it half a day and deliver it to the creamery. I 
don't remember what the average price of milk was during the 
year 19'09. I am sure there is no profit to the producer when he 
has to sell at three and one-third cents. I would say that a quart 
of milk cannot be produced on the farm and delivered to the 
creamery (milk that would, suit the requirements of the New 
York Eoard of Health) for less than ^ye cents a quart in the 
winter months. Four cents would be a good price just to let a 
man out if he got that during the summer months. The last 
meeting in NovembeT, the price was raised to the producer one- 
fourth cent. The only comment I have to make on the fact that 
the farmer g^ts three and one-third cents a quart and the con- 
sumer pays nine cents, and the fact that the middle man or dealer 
gets five and two-thirds cents a guart for taking it from the farmer 
to the consumer, is that there is a large item of ex^pense that the 
outside people do not appreciate and that the dealers are under; 
there is considerable expense in handling the milk, and it does 
cost money there is no doubt. What it is I am unprepared to say, 
but I do honestly believe that there is a very great expense from 
the time the milk leaves the farmer until it is turned over to the 
consumer. No doubt about it. 

(See list of questions and answers submitted to Young attached 
to his testimony for full report.) 



E'o. 45.] 107 

Henry Aensteij^ : 

I reside at 147 West 111th street and am branch manager of 
the Mutual Milk and Cream Company at 214 East 2 2d street and 
have been in that position since the 1st of May, 1909. I was col- 
lector for the Mutual Milk and Cream Company previous to that. 
I was in that capacity six years ago last May 2d — I sold out to 
them at that time. I have been a director, I believe, for four 
or five years but am not one at the present- time. I am on the 
executive board. At the meetings of the executive committee^ 
which are held every Friday at three o'clock, we simply meet and 
questions of business come up from time to time. As to my be- 
coming a member of the Milk Dealers Protective Association, I 
would say that one day Mr. Bleffort came up there and he says, 
" See here, it is a wonder you wouldn't join our association, you 
have got so many cans flying around." Every day when we 
shij^ped our empties we were short of cans most of the time. He 
said, " Come down and see yourself." I says, " Go ahead and just 
propose me and I will join you." Then I notified Mr. Cavanaugh 
about this thing, I told him that I was going to belong to it. He 
even never knew it until I told him. Mr. Cavanaugh says, ^^ Oh, 
you haven't got time to attend to that." I says, " You will see, 
your cans flying all around, it is wise to belong to it." He 
didn't say " Yes," or " 'No/' and I paid the $25 myself. Bye 
and bye, I told him I was a member. He says, " Well, I will 
reimburse you — I will give you that $25." AYell, I says, " You 
have got more cans back today than your $25.00 amounts to." 
They bring us back as high as fifteen or twenty cans a day. Well, 
things ran along and one day I came after that meeting. It 
was quite late, probably about one-quarter to five and they said 
they had passed on an assessment of twenty-five cents each mem- 
ber. " Oh," I says, " you can't do that ! The boss wouldn't 
certainly stand for that." ^^ Well," he says, '^ you see what you 
benefit by it. Your company is getting lots of cans." So when 
that thing was all over, this legislation had been going on for some 
time. I have been up to the Legislature myself last spring to 
Albany. Mr. Scott brought in a bill that a man could not have 
a libel for a man on his premises, unless it was done in his own 



108 [Set^ate 

count J. That was the very first job I had taken to the Mutual 
Milk and Cream Company when I started. There was a delega- 
tion one year, I should say about eight of us and we met a man 
at Albany, a Mr. Richardson. He drafted this bill himself some 
years ago. We went up there and had a lengthy discussion. Sev- 
eral assemblymen came into the room. Finally, we got his 
answer that everything was satisfactory, — that the law would 
stay the same. Well, 'then this 4 per cent, solid matter came up 
as you probably know, that this shows on an average probably 
eleven and ninety one hundredths and the State gets hold of a case 
like that and finds a sample of that kind, they prosecute you for 
it, even if the milk comes as it did from the cow. They thought 
they wanted some legislation on it. I gave my $500 
to Mr. Wetterhahn. I did not try to find out how he dis- 
bursed the money. I didn't know that a portion of this fund 
was used to pay the losses on the wagon that Bleffort drove. I 
don't know that that was the general sense of the old member- 
ship of this association. We pay our collectors more than we pay 
the association. We pay Mr. Walsh fifteen cents for every can 
he brings in and I believe he gets a yearly salary besides. Mr. 
Sam Levy is a member of the association and Mr. Wetterhahn. 
I think Mr. Geier is the head of the West Side branch. I think 
Mr. O'Neil is connected with it. Others belonging to the associa- 
tion that I know of are Michaelson, Steffans, Martin, Burlinson 
(he belongs to the Harlem association), Mr. Costly, the Tietjen 
Bros, and the Beakes Dairy Co. I know Mr. O'N^eil and Mr. 
Geier. I used to meet them nights in buying the milk. I don't 
know whether they represented the Milk Dealers Protective As- 
sociation. I have known Mr. O'.I^eil since he was a boy. He 
was in the milk business twenty-four years. I resigned from the 
Milk Dealers Protective Association because Mr. Cavanaugh 
thought I was attending too many meetings as he needed me in 
the office on the executive board; I wrote two letters, one tO' the 
Harlem and Bronx Association and the other to the Milk Dealers 
Protective Association, tendering my resignation. In regarding 
to my knowing Miller — when I worked on 103d street and I d 

lived on 111th street, and when I was a collector, I used to walk 
down to business every morning, and kept a grocery store corner 



Xo. 45.] 109 

of 103d street and Park avenue. Sam Levy used to sell him his 
milk and that is all I ever heard about Miller until finally I read 
in the papers that he had gone in the milk business and Bleffort 
followed him up with the dead wagon. That is all I know about 
Miller. I have 20'0 shares in the Mutual. I knov/ Mr. Castely. 
I don't known whether he has $9,000 fund in his possession. I 
paid my $500 to Mr. Wetterhahn. We sold milk at thirty-eight 
cents a can above exchange price. Mr. Cavanaugh either 'phoned 
or gave me a slip of paper and says that the price will be so much 
on such and such a day and I put out the price on our black- 
board to notify the drivers to inform the customers that com- 
mencing with such a date, the price will be so much. Our price 
is usually thirty-eight cents above exchange, plus freight, 

RoBEET Beuce Baker: j 

I reside at I^o. 509 West One Hundred and Seventy-third 
street. I am in the milk and butter business for forty years. I 
am in the business individually. I have no dairies or stations in 
the country, and have not had any for eight years. My main store 
is in Xew York city, ^NTo. 591 Second avenue. I have no branch 
stores at the present time. I sell all my milk in 'New York city. 
I am a stockholder of the Consolidated Milk Exchange, but was 
not a stockholder of the Milk Exchange Limited. I have never 
been an officer or director. I did not own stock in Borden's Con- 
densed Milk Company, Sheffield-rarms-Slasson-Decker Company 
or the Mutual Company. I have attended meetings a few times 
of the stockholders or directors of the Consolidated Exchange. I 
do not think I have been there in eight years. I think the last 
meeting was held at No. 6 Harrison street. I did not remember 
what took place at those meetings. 

I was supposed to pay certain annual dues to the Consolidated 
Milk Exchange and I understood that they were to pay expenses, 
rent of rooms, etc. The reason I bought some stock at that time — • 
T was running creameries, and I thought that by getting ac- 
quainted I might be able to place some of my milk when I had too 
much. I did not really know that the main purpose of the organi- 
zation was to fix a value upon milk. I take the Milk Reporter 
and I see that it says, " The Exchange made such a price," I con- 
sider that the official paper of the Exch'inge, that is the Exchange 



110 [Senate 

price. I use the values and prices that I find in the Milk Re- 
porter as a guide. I know something of what I have got to pay 
for milk when I see that. Mj contracts with the producers are 
usually verbal. Sometimes I pay five to ten cents more than the 
Exchange price. On being questioned by the referee the witness 
testifies that this price which is five to ten cents above the Ex- 
change price is not paid directly to the farmer. It is paid to the 
creamery whom it appears the witness buys his milk from as he 
does not buy his milk directly from the farmer. I think there is 
a custom in the country for milk dealers to pay the exchange 
price or thereabouts. I do not know whether the price to be 
<3harged to the consumer was ever fixed by agreement among the 
.members of the Consolidated Milk Exchange. I think I paid 
-during the years of 1907, 1908 and 1909, substantially the prices 
quoted by the Milk Eeporter as the exchange price, plus five or 
ten cents, as I have heretofore testified. I think in 1907 I was 
l)uying directly from the farmer. I think at that time I paid very 
nearly the price fixed by the Milk Exchange. I did not raise the 
price on i^Tovember first, and I am still selling at eight cents. My 
trade is on the East Side among the poorer people, and if they 
keep up that price for any length of time I think I will raise also. 
I think I will be able to make ends meet over the winter. I would 
say that my profit is pretty small. I deal in dipped milk more 
than in bottled milk. I charge six and seven, seven cents on the 
the route and six cents in the store. I did not raise the price, but 
I remember that some of the dealers raised the price in 1907 to 
nine cents. I did not. I continued in the milk business just as I 
have for the last forty years, and I have made a living. I am not 
connected with the Consolidated Mutual Aid Society and I am not 
R member of the Dairyman's Manufacturing Company or a stock- 
holder. At one time I was in a way concerned with the company 
who owned the stock, but I never owned any stock individually. I 
was with the Tri-State Dairy Company who owned some stock at 
that time. I purchased some of my milk of Joseph Laemmle and 
some of the Dairy Products Company. I buy milk already bottled 
from Laemmle. I furnish the bottles and he charges me five and 
a quarter cents per quart. In June I think I paid him in the 
neighborhood of three and a quarter or four cents per quart. All 



No. 45.] Ill 

that I had to do with that milk that I received from Laemmle was 
to put it on my wagons and have a man deliver it to my customers. 
Laemmle did not deliver the milk to me. I had to get it from the 
platform. I paid the freight on the railroad. That is in addition 
to the price I paid Laemmle. I think 1 paid two and three-quarter 
cents per quart for the loose milk and I paid the freight. My milk 
was nearly all from long hauls and I paid the railroads about 
thirty-two cents a can or nearly a cent per bottle for freight in 
addition to what I paid Laemmle. By a long haul I mean beyond 
a hundred miles. 

DEALEK. 
Chaeles H. C. Beakes : 

I reside in the city of J^ew York and am a farmer and officer of 
corporations carrying on the milk business, and especially am I an 
officer of the Beakes Dairy Company, of which I am president 
and director. I have been in the milk business for forty years. 
Mr. Alfred Ely of 'No. 31 E^assau street, ISTew York city, appeared 
as attorney for witness, and objected and contended that the ex- 
amination should be confined to the issue raised by the petition, 
and further made the specific objection that the issue raised is that 
whether on IsTovember 1, 1909, there was a combination and an 
agreement under which the price of bottled milk was raised from 
8 cents to 9 cents a quart. 

Objections were overruled and an exception taken. 

I am a director of the Beakes Dairy Company and the Grange 
County Milk Association, except I might include the Consolidated 
Milk Exchange. The Consolidated Milk Exchange is not en- 
gaged in buying or selling milk, to my knowledge, and I think it 
has not been. Beakes Dairy Company is a ISTew York corporation 
with a capitalization of $100,000. 

Objected to by Mr. Ely on the ground that the financial ques- 
tions cannot be made a subject of this inquiry. 

I own $62,000 of the stock of the Beakes Dairy Company. 

Several objections by Mr. Ely and overruled by the referee. 

I am not a stockholder in any other corporations except those I 
have mentioned, and I think I have sixty-one shares in the Con- 
solidated Milk Exchange, and I do not know that I am the largest 



112 [Senate 

stockholder. I was a member, officer and director of the Milk 
Exchange Limited. 

Objection by Mr. Ely that the questions are answered under 
protest of witness as to the jurisdiction of the court, and especially 
with reference to all questions relating to the Milk Exchange 
Limited, which ceased to exist fifteen or sixteen years ago. 

The Milk Exchange Limited, a New York corporation, was 
organized in 1882, as far as I can recollect, and did business in 
ISi ew York from 1882 to 1895, and had an office at No. 6 Harrison 
street, borough of Manhattan, city of New York, and held meet- 
ings there laterally. I don't remember exactly when. I do re- 
member that in 1891 the Attorney-General brought an action to 
dissolve the Milk Exchange Limited, but don't remember the result 
of it. 

Objection by Mr. Ely that the proper way to prove the organi- 
zation and dissolution of the Milk Exchange Limited is to produce 
the official record. 

Witness permitted to state whatever he knows about it. 

After the action was brought for the dissolution of the Milk 
Exchange Limited I and others organized the Consolidated Milk 
Exchange. I don't remember that they were about the same 
parties in the Consolidated Milk Exchange; they were connected 
with the Milk Exchange. I • do remember that some of the C*on- 
solidated Milk Exchange people were formerly connected with the 
Milk Exchange Limited. I do not know what percentage, and do 
not know who the organizers of the Consolidated Milk Exchange 
were, but I might have known at the time. I think Mr. McBride 
was one of them. I do not recall who subscribed for the stock of 
the Consolidated. Mr. W. A. Wright was the first president. 
Many of the members of the Milk Exchange Limited became stock- 
holders of the Consolidated Milk Exchange. I don't own, nor 
does any of my family own, any stock in the Borden's Condensed 
Milk Company, Sheffield Earms-Slawson-Decker Company or the 
Mutual Cream and Milk Company. Erom 1895 the directors of 
the Consolidated Milk Exchange met at No. 7i6 Montgomery 
street, Jersey City, up to 1900, I think, and then they met at -N'o. 
357 Warren street, and since then at No. 6 Harrison street, New 
York. I have been a director ever since its incorporation and have, 



:N'o. 45.] 113 

as regularly as I could, attended the meetings. I think the 
directors began to hold their meetings at 'No. 6 Harrison street 
immediately after incorporation or very soon thereafter. The 
business of the Consolidated Milk Exchange was looking after 
everything that pertains to the milk husiness in a general way. 

Q. The Consolidated Milk Exchange has a capital stock, has 
it not? 

Objected to and objection overruled. 

The business of the Consolidated Milk Exchange was the gather- 
ing of all information we got in regard to the production of milk, 
and it has a capital stock of $1,500 divided into shares of $25 
each, but has been reduced to $2 each, and I hold sixty-one or 
sixty-three of the $2 shares out of the 750 shares of the corpo- 
ration. The stockholders pay annual dues of $2. The directors 
do not fix the price to be paid by members of the Consolidated 
Milk Exchange to producers. They never pass upon the amount 
that is to be paid. I know a newspaper called the Milk Re- 
porter. I do not know that the Milk Reporter, a newspaper, pub- 
lishes the exchange prices. I see the values as expressed in the 
Milk Reporter. I don't know wher© they get the prices from. 
These prices are not sent by the board to the Milk Reporter, but 
I do say that the prices are not fixed by the board of directors. 
The prices shown in the Milk Reporter are not fixed by the 
directors. 

Q. ;N^ow, what, if anything, did you have to do with these 
prices ? A. The exchange may have expressed its judgment as 
to the value of milk, and its judgment may have been identical 
with these prices. 

The board of directors expresses its judgment as to the value 
of milk by resolution. I have not got the minute book of the 
board of directors of the Consolidated Milk Exchange. Mr. 
Laemmle, the secretary, will undoubtedly produce the books. 

No member of the Consolidated Milk Exchange discussed with 
me taking up the matter of the campaign of education of milk. 

Witness by advice of counsel declined to sign his name and 
on objection by Mr. Ely was excused. 

The same ruling, on witness being requested to write Beakes 
Dairy Company. 



114 [Senate 

Witness shown a paper. 

Q. Did you write the words, '^ Standard Dairy Company ? " 
A. Standard Dairy? 

Q. Beakes Dairy Company ? A. Yes, sir. 

And that is my handwriting. Paper was signed in 190i9, and 
the paper offered in evidence, the same being a proposed agree- 
ment to be circulated among milk men to raise a contribution 
for an educational campaign in the columns of the New York 
Tribune, a newspaper, wherein the milkmen were to share the ex- 
pense, and signed only by said two parties. The date of the paper 
was May, 1908. For six months previous to May, 1908, Mr. 
Gorman had been around proposing to do certain things through 
the newspaper. Milk was being maligned, mothers were being 
frightened, and I was getting ready to double my subscription, 
if the value of milk as a food product could be put before the 
people right. The papers were full of untrue adverse criticism, 
on milk and I discussed the subject many times with Mr. Gorman. 
The price was nine cents when I discussed it, but the price had 
nothing to do with it. It remained at nine cents from October 
or E'ovember, 1907, until April 1st or May 1st, 1908. In May, 
1908, the price went up to eight cents, bottled milk, and this 
was the time that I signed the above paper. I signed the paper 
to help Mr. Gorman in his work. I never gave Mr. Gorman a 
ballot, shown me, of the Consolidated Milk Eixchange. 

Ballot received in evidence and marked Exhibit B for indentifi- 
cation. 

I have seen the paper, and the iBtters of the alphabet on it are 
in my handwriting. Mr. Gorman brought the paper to my office 
in the winter and wanted to get eack dealer to sign it, and I did 
so thinking it would help him. There are some names on the 
paper of members of the Consolidated Milk Exchange. Some of 
the milk companies, while not members themselves, their offi- 
cers are members of the Consolidated Milk Exchange. I am an 
officer of the Beakes Dairy Company and also an officer of the 
exchange. I don't know how many other companies are similarly 
situated. List of the members of the Consolidated Milk Ex- 
change marked Exhibit 2 in evidence.. 



Iso. 45.] 115 

These different letters represent that different ones would be 
better able to pay different sums to the campaign of education; 
Sheffield's a little than Borden's, and so on. It was a classifica- 
tion of dealers as to the amount of business they were doing. I 
don't think I said anything to Mr. Gorman about educating the 
public up to the idea of paying more for milk. I don't remember 
of ever having talked this over with other members of the ex- 
change. If the public understood the value of milk as a food 
they would use more of it. It is the third cheapest food today, 
and I was willing to pay a hundred dollars as my share in ac- 
quainting the public with the value of milk as a food, and I 
thought the campaign would increase the demand for milk 25 
per cent. Mr. Grorman came to me and asked when the exchange 
would meet, and if he could present the matter to them. I told 
him to come down and I would ask the directors. He came down 
to 6 Harrison street where the exchange holds meetings, and 
I think what he had to say was very unsatisfactory to them. Ex- 
hibit 1 was signed in May, 1909. Milk was eight cents a quart 
then. The directors hold meetings sometimes three and four 
times a month. I attended regular meetings. They are usually 
held at 6 Harrison street; probably three or four meetings a year 
are held in Jersey City. The minutes are written out from the 
memory of the secretary. The board of directors give their judg- 
ment on what the value of milk is. The resolution is the result 
of a general discussion, taking into account the conditions in all 
sections of the country, and the estimate of value is for the day 
on which it is made. The Milk Reporter gives the price per 
quart, while the exchange arrives at value per can. I don't think 
any of the members send the notice to the Milk Heporteir. Be- 
fore arriving at the value of milk, the exchange takes into ac- 
count the conditions in the country, whether the supply was ex- 
cessive or short, and the manufacturing basis, the selling basis, 
and everything that went to make up the value of milk. 

Q. What was the object of the Board of Directors of the ^lilk 
Exchange giving their judgment as to the value? A. That there 
might lie an intelligent expression of the judgment of the direc- 
tors as to the value of milk, and it was not merely the intention 
that this resolution should be communicated to the stockholders. 



116 [Senate 

I do not know that I could specify their intention any further 
than '^ the meeting had made an accurate and intelligent, tangi- 
ble, expression of value, that everybody conkl use that v^anted 
to." Any one could ask us and we w^ould tell them. Reporters 
frequently inquired. The members of the Exchange paid dif- 
ferent prices and were: not controlled by the Exchange price. The 
Beakes Dsiirj Company in pricing, followed the Milk Exchange 
price ''to a degree." In some countieis I paid more and in some 
less, depending on local conditions. I have a large acquaintance 
among the members. All the meimbers of the Exchange^ do not 
follow Exchange prices. We make the value subject to freight 
charges, etc., and the price mentioned in the " Milk Reporter " 
is a net price, and charges and everything had been taken off. 
The value expressed by the Exchange is thei value of milk at the 
depots in New York. Value and price are not synonymous 
words. The Exchange has nothing to do' with the selling or 
buying. The prices shown in the ^' Milk Reporter " and made 
exhibits may be the same as the values expressed by the Ex- 
change, with whatever deductions are to be mad© for freight 
charges, etc. I have seen posital cards sent out by the '' Milk 
Reporter " to subscribers, giving the Exchange value. I some^ 
times pay Borden's prices. The members made no' eiffort to buy 
personally at Exchange prices. The service that the valuation 
gave to members was that it gave them an intelligent basis as to 
the value of milk at the time. Years ago there was difficulty to 
arrive at settlements between the producers and dealers, and the 
value fixed by the Exchange greatly facilitated that. If the pro- 
ducers are not satisfied Avith the value fixed by the Exchange, 
they sell to somebody else. All the members have not the same 
opinion as to the value and they buy at different prices. There 
is the hardest competition between the members that you can con- 
ceive. Many think the expression of value is useless, but I don't; 
because I think it gives an intelligent, tangible expres'sion of the 
value of milk at the time, and this expression ^' is valuable to 
everybody that gets it just to that degree." The public has con- 
fidence in it because of the accuracy of the judgTuent of values 
of the directors for fifteen j^ars. The directors do not make the 
price in the interest of the dealers. There is no agreement not 



:N'o. 45.] 117 

to bid against each other in the market, and no presumption that 
thev will follow Exchange prices. The Milk Exchange Limited 
is different in some respects from the Consolidated. The stock- 
holders of the old Milk Exchange did not always follow the price 
fixed by the Board. There was nothing to prevent a man paying 
any price he could get it for. The old Exchange declared a price 
and issued their card. They sold milk on a commission basis. 
The old Exchang-ei made a price and issued a card to the public. 

Q. Previous to November 1, 1909, .did you have any discus- 
sion with any other milk dealer in reference to raising the price 
of bottled milk? A. Yes. 

Q. With whom did you discuss it? A. Why naturally, when- 
ever two or three dealers were together, the matter was discussed. 
I don't recall with whom. 

The Consolidated Milk Exchange passed no resolutions on this 
subject. It was discussed among the members, but not among 
the Board. The discussion began back in August, when the prices 
began to go up. We all discussed the desirability of getting more 
money for the milk. I think I mentioned to Mr. Blizzard of 
Borden's, w^hen I was selling them some condensed) milk, asking 
him, '^ Were they going to try to go through the winter on eight- 
cent milk ? " He said they had not taken the subject up ; and 
thought it was going to be pretty hard. It was a matter of dis- 
cussion among the dealers whenever they met. The Mutual Aid 
is a partnership carrying on the insurance business of dealers. 
Boi'dens are not members. I don't know what the Mutual is. 

In the summer and fall of 190i8, the average price per hundred 
j;0unds was more than the average price per hundred pounds in 
!19()9. The price to the consumer does not drop simultaneously 
with the falling of the price to the producer. The price of bottled 
milk has stood uniform ever since it dropped from 10 cents. It 
has been at S cents. It dropped from 12 to 10, and from 10 to 8 
cents. The value of milk runs do^vn in June and July to 2i/4. 
and 2^/2 cents. We have to take more milk than we want in the 
flush season in order to have enough when it is scarce, in January 
and February. In the flush season we have to manoifacture, and 
al^^ays at a loss. The Bordens have not had the choice of the 
dairies. There is a variety of prices all the time. I decided to 



lis [Senate 

advance the jDrice when I heard Bordens had, put up the price. 
My driver? brought in word on the 29th of October, I think. I 
put out my notices at once. I did not know Bordens were going 
tc advance the price. And dipped milk was advanced to 7 cents 
about the same time. Dealers deliver dipped milk to the dooT 
for 8 cents. Before ^ ovember 1st it wasi 7 cents. Store-keepers 
sell diijped milk at 6 cents ; some st<^re9 sell at 5 cents. Generally, 
all kinds of milk were advanced ]!^ovember 1st, by dealer to con- 
sumer. " The advance was not contemplated.'' We all under- 
stood the desirability and necessaty of it. " For instance, I 
couldn't advance my prices unless Borden did; if he served -B-ve 
families in a house and I served five, and I put my price up and 
he stayed still, I would lose my customers." All dealers hoped 
that the price would go up, but no one suggestcid any method of 
putting it up, nor was there any agreement to put it up. When- 
ever we discussed it we talked about the inability of dealers to 
carry on the business unless the price was advanced. There was 
no discussion about getting together, or about advancing the price 
at the same time, and they did not. all advance at the siame time. 
In some instances they were several days apart. There are so 
many dealers that no one could tell whether they would all go 
up in price. If they all put it up at the same time, it would be 
all right. 

Q. And discussing it was a method' of bringing this about, 
was it not? A. No. We only discussed the necessity of getting 
more for milk if we were to stay in business. I couldn't put 
my price up unless Bordens did. 

There was necessity for concerted action if the price was to 
go up. Before I raised it I told noi me'mber of the Exchange that 
I was going to raise the price to 9 cents. As soon as my drivers 
brought word that Bordens had advanced the price I got out 
my notices. 



Xo. 45.] 



119 



EXHIBIT 10. 



Schedule of 


Peices P 


AID TO Faemees eoe Milk Dueii^g the 




Years 1907, 


1908, 


1909. 






• 


1907 
100 lbs. 


Qt. 


1908. 
100 lbs. Qt. ":! : 


1909. 
. 100 lbs. Qt. 


January . . . 


. 1.67 


.0367 


1.82 


.03931 


1.76 


.041 


February . . . 


. 1.53 


.03277 


1.74 


.03647 


1.73 


.03748 


March 


. 1.41 


. 03035 


1.60 


.03426 


1.54 


.03652 


April 


. 1.39 


.03033 


1.37 


.02'871 


1.33 


.03095 


May 


1.17 


.02645 


1.0'9 


.02366 


1.08 


.02575 


June 


.99 


.02248 


.92 


.01991 


.90 


.02444 


July 


1.10 


.0242 


l.O'S 


.02241 


1.09 


.02697 


August 


1.28 


.02906 


1.22 


.02741 


1.25 


.03143 


September . . . 


1.42 


.0317 


1.34 


.02900 


1.43 


.0-3557 


October 


1.72 


.0'3'89O 


1.60 


.03678 


1.70 


.04148 


^November . . . 


1.82 


.03931 


1.72 


.03848 


1.84 


.04301 


December . . . 


1.82 


.03931 


1.77 


.03970 


1.91 


.04547 



The foregoing prices are the absolute net money paid to the 
farmer and do not include any other expenses, such as cans fur- 
nished to the farmer, can washing or any other expense whatso- 
ever in the matter. 

The exchange does not try to promote uniformity in the price 
of milk paid by the members of the exchange to producers nor to 
sellers, nor to consumers either. The dutieis of the legislative 
committee were to look after legislation affecting milkmen. Some 
small portion of the expense of the committee's work at Albany 
may have been paid by parties outside the exchange. In matters 
of general interest, milkmen in general frequently contributed. 
The reason why I may have requested a special meeting of the 
board of directors of the exchange was ^^ because of the changed 
conditions in the trade." The purpose of the meetings of the 
board was to obtain an accurate expression of the valuation, an 
accurate judgment as to the value at that time of milk, and they 
had to keep holding meetings if they expected to measure it cor- 
rectly, and the reason the directors undertook it was that the 
market might be accurately gauged, that it might be before the 
buyers and sellers, an accurate gauge of the value of milk in 



120 [Senate 

this market under tlie conditions existing. In making the con- 
tracts with the farmers thej frequently stipulate " that they want 
the value expressed by the Exchange." 

Q. Could you tell me what proportion of your agreements with 
farmers contained that stipulation? A. Well, you know that is 
only for the milk they brought me. They weren't o'bliged to 
bring me their milk the second day. If when I send up my prices 
at any time they were not satisfactory, they are at liberty to 
quit right the next day and they would quit, too, if they were 
not satisfactory. 

We make no contracts, and I can't tell what percentage of 
milk is bought upon exchange prices. We have simply an un- 
derstanding from day to day. We probably bought none at ex- 
actly exchange prices; but all about that valuation. In making 
contracts we take everything into account: Bbrdeu's, exchange 
prices, manufacturing price and everything else that affects the 
price. I don't think there is any price and sales committee as 
provided in the by-laws. There may be such a committee men- 
tioned in the by-laws and minutes and I think it is a mistake to 
designate a committee by that name. The minute book is the 
only record we have, and if an amendment to the by-laws is not 
there, I do not know where to find it. It is not necessary for the 
board to act upon an application to become a member. I never 
was secretary of the exchange, and I do not know that minutes 
were kept prior to January, 1906, but I presume they were ; but 
I don't know anything about it. I am under the impressiou that 
Mr. Walker was secretary prior to Mr. Laemmle. The dues are 
paid to Mr. Laemmle. The dues are $2 per year. I became a 
stockholder at the incorporation of the exchange. The by-laws 
call for appointing certain committees and they are appointed. 
They are sometimes appointed and may not do anything. I do 
not know what I called on Mr. Alexander Campbell for a few 
weeks ago, except about the buying or selling milk. We had 
nothing to say about the testimony to be given at the trial. Mr. 
Campbell did not say anything about that " He would tell the 
truth at this inquiry." I have bought milk from him on many 
occasions by telephone. I have heard of the Milk Dealers Pro- 



I 



'No. 45.] 121 

tective Association. They gather cans for me. I think I paid 
them about seventy-five dollars last year. I pay on the basis of 
cans collected. I don't know whether the association is a corpo- 
ration or not. I never attended a meeting. I may have at- 
tended meetings once a year for the past eight or ten years. I 
have heard of Mr. Bleifort, who works for the Milk Dealers 
Protective Association. He was a can collecter. I think Mr. 
Weatherhon is the secretary. I never heard that it was part of 
the object of the Milk Dealers Association to harass those sell- 
ing milk below the market. I did try to buy the business of a 
dealer who was selling below the market. 

Q. Now, Mr. BeakeSj did you yourself in any way ever try to 
influence anybody not to deliver milk to a dealer who was selling 
below the market ? A. On one occasion I may have told a cer- 
tain party that a certain man was cutting the market, and not to 
give him any more milk that he felt he ought to. 

I asked the Phoenix Cheese Company to do this. Miller & Co. 
was the party that I directed the attention of the Phoenix Cheese 
Company to. I learned that they were buying milk from the 
Phoenix Cheese Company. I talked the matter over with Mr. 
Carpenter, and told him what they were doing to us. I told 
him they were cutting our trade, and '^ if he did not feel obligated 
to give them a whole lot of milk, it would be a benefit to me.'' 
I had only one conversation with them. I may have spoken to 
the International Milk Company, telling them that the Miller 
Brothers were taking away the trade. I don't know to whom else 
I may have spoken, or who may have spoken to him about it. 
I did not offer Mr. Carpenter anything if he would cancel the 
contract with the Miller Brothers. Miller is not a member of 
the Consolidated Milk Exchange, and I heard that Miller said 
that he could get $1,500 if the contract was broken. I never 
had any conversation with Mr. Campbell as to what testimony 
was to be given at this trial. My points of shipments are from 
Orange, Delaware and Dutchess counties. I ship by boat 
from Newburgh, and so does E. D. Pierson. The freight rate 
by rail from that point is twenty-six cents. We pay thirty-two 
cents by boat and they pay the back charges. There is no rebate 
from the boat. The back charges cover the cost of hauling from 



12-2 [Senate 

the country to the steamboat. The paymeaits to the Milk Dealers 
Protective Association were usually made over the counter; 
sometimes in checks. I haven't got the receipts. My impres- 
sion is that assessments are made v^henever the association 
requires money. These assessments are for the collection of 
cans. I am not a member of the association. I have attended 
dinners given by it, and acted as chairman. I have 22 creameries 
or stations, and at five of them I buy on exchange prices, and five 
on Borden's. ^^ The others I just send them word what I will pay 
them until further notice." About February 1st I reduced the 
price from nine to eight cents to a small extent, but did not ad- 
vertise it, sooner than lose our customers. At one creamery I 
buy on the butter fat test, that is the Babcock test. About No- 
vember 9th or 10th, I talked on the 'phone with Mr. James C. 
Ryder of Greenpoint, about an advance in price to nine cents. ^^ I 
think I asked him if they had gone up to nine cents." He said 
they hadn't. He said : " I went up two years ago and the fel- 
lows roasted me, and now I am going to get even. I am going to 
get them back." I dropped it there, and did not urge him to 
advance the price. I talked with Mr. Wierck many times, but 
don't recall what about. Mr. Wierck never told me he was going 
to try to get the dealers in Williamsburgh to advance the price. 
I never had any conversation with Henry Martin of the Tioga 
Dairy Cbmpar.y ^' in reference to a meeting held over in Jersey 
City between myself, Rogers, president of Borden's, and Horton, 
president of the Sheffield." I never had a meeting with any of 
these men to talk over the advance in price. I casually, as I 
met different milkmen, talked over the advisability or the neces- 
sity of raising the price of milk ; and all these conversations took 
place long before E^ovember first. 

Q. Do the members of the Consolidated bid against each other 
for milk in the country ? A. Oh, yes. 

And I can illustrate it in this way : At one of my places Mr. 
Slaughter buys, he has a place near and Mr. Jordan has a place 
near. They are bidding for my goods all the time and I for 
theirs. Dairies go in and out. Sometimes they have them and 
sometimes I have them ; and in the city " they are selling all 
through one another's " routes, and there is no agreement not to 



No. 45.] 123 

invade each other's territory either in the country or in the city. 
They try to get each other's business away from them, and this 
applies to all members of the exchange. Various devices are re- 
sorted to to get customers away from each other. There is a 
general competition, not only among members of the trade but 
between all dealers in the milk business, and there is not and 
never has been an effort to partition out various territories to 
different dealers. The difference in the railroad and boat rates 
from Newburgh is represented in cartage, trolley charges, to the 
boat, which is twelve to fifteen miles. 

William H. Bennett: 

I re-side at Groshen and have been a farmer all my life. In 
1860, I was in business as a milk dealer, exclusive of milk pro- 
ducing. I was in Brooklyn at that time. My farm is about 
sixty miles from 'New York. I am a member of the Consolidated 
Milk Exchange and have five shares of stock. I never was in the 
old exchange. I have never been an officer or director of the 
Milk Exchange. I attended the first meeting of the stockholders 
of the Milk Exchange. I sell my milk at the present time to the 
How ells Condensed Milk Co., located about a mile from me, 
and sell on the Milk Exchange price and have sold' on the 
Milk Exchange price for about eight or ten years. I make my 
agreement in the spring. It is a verbal one. Some of my neigh- 
bors sell at the exchange price, others take Borden's price. 
Howell always gave me choice between exchange and Borden's 
price until last year. The exchange price is printed in the coun- 
try papers. They average about the same. During 1909, I 
averaged about ten cans a day. We keep about 50 cows but they 
are not all milkers. In the winter time it costs me a little over 
one and one-quarter cents to produce a quart of milk, that is, for 
feed alone; that does not include any other expense. It costs all 
of three and one-fifth to three and two-fifths cents to produce a 
quart of milk or even more than that. I think in order to make 
a decent living and to make a reasonable profit, we should get 
three cents for four months, four cents for four months and five 
cents for four months; that is, three cents for May, June, July 
and August ; four cents for March, April, September and October ; 



124 [Senate 

and five cents for November, December, January and Febru-ary. 
I think the Milk Exchange as it is at present operated, is beneficial 
to the producer, because in a great many months we have had 
a quarter of a cent extra, and some months a half a cent extra, 
once in a while a month, that we wouldn't have got otherwise if 
we hadn't had a director for to help us out because many a time 
that I know of I heard from my director home that one vote had 
carried it ; that is the reason that I think that we have gained by 
the Milk Exchange. I don't know how many farmers are di- 
rectors of the Milk Exchange. Henry Young is a director. I 
saw a separator running in Howell's, but I don't know why they 
were using it. I don't think there is a flush of milk at the present 
time in my locality, and I know nothing about milk or cream being 
kept for any length of time. 

David Bleiek: 

I reside at 1361 Madison avenue. We are bakers and milk 
dealers ; have been in business about thirty years under a partner- 
ship, Hirschman & Bleier. The other partner i*s my sister, Mrs. 
Hirschman. I have two stations located at Roxbury, Delaware 
county, and one at Halcottville, Delaware county. Our main 
ofiice is at 518 East -Seven tv-second street. We have a branch 
store at Lexington avenue and Eightieth street; one at Eighty- 
eighth street near Park avenue; one at Broadway and One Hun- 
dredth street ; one at Columbus avenue and Eighty-second street ; 
one at Park avenue and Sixty-second street; one at Avenue C near 
Fifth street. We have another branch for summer business in 
Far Bockaway. I think I was a member of the Milk Exchange 
Limited. I am a stockholder in the Consolidated, and own five 
shares. I have never been an officer or director. I do' not own 
stock in Borden's, Sheffield, or the Mutual Company, and was 
never an officer or director. I have never attended: meetings of the 
Consolidated. I have been in the room attending meetings of the 
Mutual Aid Society. We talked over nothing but fire insurance. 
I also attended meetings of the Dairymen's Manufacturing Com- 
pany, held at 6 Harrison street. I am a stockholder. I have never 
been an officer or director. I think I attended one meeting of the 
Consolidated in Jersey City, at which officers were elected. That 



'No. 45.] 125 

was six or seven years ago. The Consolidated does not deal in 
milk. I don^t know as it does much of anything. It fixes the 
value to the farmer, in a way. They simply give their idea of the 
value of the milk to the farmer. We use that value as a guide in 
our business. We use it as a basis. We buy our milk on the cream 
test, and we buy milk below the Milk Exchange, at the Milk Ex- 
change price, and above the Milk Exchange, or according to the 
amount of cream there is in it. I find out this value from the Milk 
Reporter. I do not make my contract with the producer for any 
specified time. We don't make any agreement particularly; we 
gauge it according to the amount of cream. AVe test the milk and 
pay accordingly. A man generally comes to the manager and tells 
him he wants to sell his milk, and the manager tells him to bring 
it on ; he brings it every day, and then at the end of the month he 
gets paid according to the prevailing price. There is one fact I 
want to tell you. We have a creamery company which is a com- 
pany by itself. The creamery company consists of Hirschman, 
Bleier and Kaetor at Roxbury. At some times the partnership 
at Eoxbury sells to others besides Hirschman & Bleier. Kaetor 
is dead, and his son-in-law, Ralph V. Ives, conducts his part of 
the business for him. I am acquainted with quite a number of 
the members of the Consolidated. I do not know whether there is 
a custom among them to raise the price. I never discussed that 
with any of the members of the exchange. I can't state offhand 
the average monthly prices that I paid to the producers for milk 
during the years 1907, 1908 and 1909. On an average, we sell 
about one hundred and sixty cases of twelve bottles each per day. 
I sell about thirty cans of forty quarts each of fiuid milk per day. 
I raised the price from eight to nine cents about the fifth or sixth 
of I^ovember. My canned milk is almost a wholesale trade. My 
margin is twenty-eight cents above cost on canned milk. That is 
a margin on what the milk cost me to Weehawken. I had no con- 
ference with any one previous to ^oveanber 1st in reference to 
advancing the price of milk. The necessity influenced me to ad- 
vance the price of milk at the time I did, the increase in the cost 
of milk and other incidental expenses which are connected with 
our business. We had to do it in order to get a fair margin of 
profit. I was also influenced by the fact that other concerns did it 



126 [Senate 

also. I never knew of the raise in price until one of my drivers in- 
formed me of Borden's raise on the 1st. Gorman never came to 
me in reference to the campaign of education. Along in 1906 and 
1907 I raised the price a cent a quart, from 8 to 9 cents, 
and afterwards reduced it to 8 cents. I also advanceid the 
price of bottled milk; we did it because the others did it, Borden 
and Sheffield. Borden's, Sheffield, or the Mutual Company have 
no interest whatever in my business. I received twelve or fifteen 
postal cards from the Milk Exchange, showing the exchange price 
or value. I paid no attention to them. If you are looking for a 
trust, I want to tell you there is no such thing, or if you thinii 
the Milk Exchange regulates the price to the consumer, you are 
entirely wrong. There is no such thing. And if you want to know 
what the milkman ought to really get for his milk, they are not 
getting any too much at -nine cents a quart. The dearest price in 
the year is through the winter, and we need that nine cents and 
need it badly. In the summer time when milk is cheaper, my 
business is cut in half. The people go away, but my expenses re- 
main with me entirely. Everything in our business costs us a 
great deal more than it did before. We pay 75 per cent, more for 
horses, 50 per cent, more for wagons, and twice as much for oats 
and hay. Our help costs us more money. 

Statement received in evidence, marked Exhibit 'No. 11, show- 
ing average price that Mr. Bleier paid for milk during each month 
of the years 1907, 1908 and 1909. 

(The last month is estimated.) 

Alexander Campbell : 

I reside in Brooklyn and am engaged in the prodiuction of 
milk. I am als'O president of the Alexander' Campbell Milk Com- 
pany, a New York State corporation, organized in 1890'; first, as 
the New York Dairy Co^mpany in 1878. Capital stock of 
$500,000, of which I own over $200,000. The officers are, Alex- 
ander C. Campbell, treasurer; William F. Campbell, vice-presi- 
dent; and myself, president. Both are sonsi of mine.. The 
members of the board are Alexander Campbell, John^ Bingham, 
Erik Logorquist, William F. 'Campbell and Alexander C. Camp^ 
bell, all residing in Brooklyn, except John Bingham, who resides 



Xo. 45.] 127 

in Xew Jersey. The capital stock was originally $250,000. 
Stock was issued for property, such as creameries in the 
countries, horses, wagons and machinery. I don't know as there 
was any good will originally. When the company was organ- 
ized it was composed of gentlemen " whose object at the time, 
and whose object has been carried out since', wasi to improve the 
condition of the milk. Among those who were — a number of 
very prominent men were among those at the time, such men as 
Drexler, Morgan, Drexler & Company, Cornelius R. Wagner." 
They were simply stockholders. I think the l^ew York Dairy 
Company's capitalization was $50,000. The business was divided 
between 'New York and Brooklyn, and I think the capital stock 
was between thirty and forty thousand dollars. When the Alex- 
ander Campbell Milk Company was organized in 1890, money 
was paid in by degrees until the entire amO'Unt of $2i50,000' — 
some cash and some property, as required by the business — was 
turned in. I have been in the milk business forty-five yearsi in 
the city of New York and Brooklyn. When the capital stock 
was increased to $500,000, stock was sold absolutely for money 
and nothing else, — $2o0,000. E'one sold for less than $90. We 
have a branch office in Brooklyn, one in Richmond Hill and one 
at Hempstead, Long Island. We have creameries in the country 
in Monroe, Oxford and Orange counties, place called Boonville 
on the Central road. Our Jersey place is in HackettstO'wn, and 
Pennsylvania, 'Stirrucks, and we have just taken another at a 
place near Como, Pennsylvania, and another in New York near 
Binghamton. At these stations we receive milk from the stations, 
the milk is transferred to our Brooklyn place and from there we 
shi]D it to the consumer. Practically all our milk is sold in the 
city of Brooklyn in bottles. !N^early all the milk we buy of the 
farmer is delivered at our station. We always pay the freight. 
What we pay the producer appears on onr books. I am not an 
officer, director or stockholder of any corporation dealing in milk. 
T own a few shares which entitled me to membership in the Con- 
solidated Milk Exchange. The dues are paid by the coanpany. 
I never attend the stockholders' or directors' meetingsi of the Ex- 
change. T never was an officer of it nor was I ever an officer or 
dii'ector of the ]\Iilk Exchange, Limited. I have been at the 



128 [Senate 

Milk Exchange, 6 Harrison street, in the last ten years. ^^ I can 
pro'bably explain this to the satisfaction of the conrt by saying 
that this C'onsolidated Exchange is what I call a lengthened 
shadow of an old committee that existed about thirty-five years 
ago, of which I was a member. That committee undertook 
through the necessities of conditions to meet the farmers and try 
and arrive at the values of milk from season tO' season. They 
were not an organization; they were just a few of the dealers 
who found that the necessities of the condition of things abso- 
lutely required something of that kind, and an effort was made 
by this committee, at times with the farmers and striving to 
arrive at what could be paid, what would be considered a fair 
price for milk. . . . All the circumstances, supply and de^ 
mand, etc. were taken into account.'' I regard the Consolidated 
Exchange as a continuation of that same body, '^ until it has be- 
come a sort of a custom to meet, I suppose; that is, the way of 
arriving at the value of goods, I suppose, and in some way, 
making it known. I do not recall them now. They are mostly 
dead. My impression is that Johnny McBride, president of the 
Exchange, was one of that committee. This committee of .dealers 
simply met and talked the matter over' and tried tO' arrive at the 
fair value of milk — all things being taken into account. I don't 
know if they had any other way of communicating their views 
to the public. 'A farmer being a member of the committee might 
communicate it to the people in the country. The members were 
in no way controlled by the prices fixed by that committee. The 
trouble with the Consolidated Exchange, it does not difierentiate 
in the quality of milk. I don't think they fix the price. I don't 
think they can and I never knew them to be able to successfully 
fix any price for milk." The price fixed by the committee would 
not be controlling, even as to themselves. I think that my com- 
pany has not one contract which calls for a higher price than 
that established contract which, calls for a higher price than that 
established by the Exchange. The committee and others have 
to go out and do the best they can with the farmer. 

Q. What is your idea of what percentage of the milk available 
for us© in the city of 'New York is controlled amongst the mem- 
bers and dealers of the Consolidated Milk Exchange. A. None 



Ko. 45.] 129 

of it ; absolutely no man has a control over it. Any man can go 
behind me or my customers, my creameries and buy the cream 
saij day he chooses if he pays more money. 

1 have been at the rooms of the Consolidated Exchange not a 
dozen times in twenty years. I went there to sell out a business 
and get all I could for it. I have seen copies of the '' Milk 
Reporter/' and I believe the values placed by thiO Exchange are 
quoted there, and it assists me to a degree in purchasing milk, 
because '' it gives me an idea as to values/' and I simply go out 
among the farmers and present these figures and other figures — - 
Borden's and others — and make the best prices I can. The only 
time I nsed the price established by the Milk Exchange was, 
^' when it came near the value of goods as shown what they were 
worth in other lines of business (butter and cheese). " I don't 
think any committee or a dozen committees can ehange the value 
of the price of milk not a hair's breadth, not a hair's breadth." 
All the dealers combined cannot control the farmers. They cart 
churn it — the dealers can't, it doesn't pay. The $500,000 of 
our capital stock is not all sold — one-half of it is 7 per cent, 
preferred stock — not all issued. We paid 7 per cent, on at 
least $150,000 of oiir preferred stock, I think for ten years. We 
paid 8 per cent, on the common stock, except in bad years. There 
\vas one year that we didn't pay 8 per cent, on the common. We 
never paid more. We probably sell 1,000,000' quarts in a month. 
1 cannot tell you the profit on a quart. Take one-fourth of a cent 
ofi^ and it would bankrupt the company; give us one-fourth of a 
c€nt and we can pay the legitimate cost on the investment, the 
legitimate interest. I was not an incorporator of the Consoli- 
dated Milk Exchange, but came in afterward. I may have said 
to a dozen people that the Consolidated Milk Exchange really 
had no mission here, simply because they didli't grade the goods, 
but I never said it was practically a continuation of the Milk 
Exchange, Limited. I had a conversation with Mr. Gorman and 
others. I didn't waste any time with him. I have no stock in 
the Sheffield or Borden companies. ^o one notifies me what 
prices are arrived at by the Exchange. I don't know what the 
niethods were of communicating what the Exchange doesi. I 
never received a notice from the Exchange, except of annual 
5 



130 [Senate 

meetings. I think the Milk Exchange, Limited, had some way of 
notifjing its members. I think we get the '^ Milk Reporter " — 
someone in our office may see the Exchange prices in the '' Milk 
Reporter.'' We make contracts for a definite period of time — • 
sometimes above and sometimes below, and we try to keep as low 
as possible — siame as other people do, I suppose. We 
raised the price from eight cents to nine cents about the ninth, 
day. I think I knew just as much about it as if I had discussed 
it with all the Milk Exchange members. It was a natural sub- 
ject to bring up with any milkmen because of the great necessity 
■ — the expense of delivery under the existing conditions that made 
it absolutely necessary to put up the price of milk. I don't know 
about the discussion being general in the trade. I don't remem- 
ber who I may have talked it over w^ith, except I may have talked 
it over with the manager of the Empire iState in Brooklyn. I 
think his name was Needner. About all he said was that if we 
had to pay our bills as we were in the habit of paying we^ w^O'uld 
have to get more for the goods!. It was said that the neicesisity 
warranted it, but no agTeement was made to advance it, and they 
advanced it a week or two before; we did. I never agreed with: 
any one to advance the price. " I have advanced the price of 
milk when all others were down, and I think I am able to do it 
to-day with the class of trade that we serve and the quality of 
goods that we put out. That is the only thing wei rely on, and 
if I had to sell milk for less than nine cents to-day you could buy 
my stock veiry low." I talked about m^ilk with M/r. IIenr3^ 
Beakes. I wanted to sell more milk and he wanted to buy it, and 
I succeeded in selling him some. We were paying V2 cent a 
quart above the Exchange^ pricei. In September, this contract I 
show you, calls for $1.60 per forty-quart can and we paid the 
freight in addition to that — October, $1.Y0. I don't think it 
was above the average quality. We were under contract and had 
to pay it. We sold this milk at less than contract prices'. In 
reference to price, after talking over the conditions, I told him; 
that we would have to have more money for our goods. 

Q. You said to him it would be advisable to advance the price 
of milk ? A. I may have said that. I am not sure. I don't know 
what exact langniage ; it was in the air ; it was in our conversation: 



'No. 45.] 131 

that we would have to get more money. He said he could not 
stay in business unless he did. We came to no agreement about 
])rice. This was in October, 1909, about two weeks before the 
first. I think we notified our customers about November 9th of 
the advance in price. I may have said that I didn't think the ex- 
change was doing any good in the milk business. I didn't say that 
the Consolidated was doing substantially the same as the Exchange, 
Limited, because I didn't know anything about the Limited. The 
newspapers know nothing about the milk business. They say in 
one column that we are charging too much — and in another '^ that 
the babies of the city are dying from uncured milk." If they 
would study the matter, the papers could do the community good. 
If the papers would investigate, they could do the community a 
lot of good. Milk is being sold today at a loss. Milk is brought 
in here from 400 miles in a bottle and they distribute it, put it on 
a wagon, and that wagon has to go from two o'clock in the morning 
to twelve o'clock to distribute the milk over sixteen miles of route, 
and he distributes on an average 170 quarts per day per man and 
wagon, and no dealers from the first day of December until the 
first day of April can pay their expenses out of the business, but 
the summer months they make profits to overbalance the loss in 
winter. In the month of June milk is two and one-half cents or 
three cents a quart, and we are obliged to take from the farmers 
all they produce. There is a flush of milk in summer just when 
we don't want all of it. It is difficult to get the farmer to produce 
it in the winter when we want it. The good trade leaves the city 
in summer when there is plenty of milk ; thus there is a flush or 
surplus of milk, and the consequence is the price of 'butter drops 
down. I have seen butter at eighteen cents a pound when milk 
w^as two cents. It takes ten quarts to make a pound of butter. 
The first cost in the country is twenty cents, and after you have 
paid all the expense of getting it to the city and manufacturing it, 
you get eighteen cents for what originally cost you twenty cents. 
You have to take the producer's entire outfit in order to have 
enough to supply the demand during the cold weather. We paid 
8 per cent, on our common and 7 per cent, on our preferred, but at 
the same time we went to the bank and borrowed $40,000 to carry 
on our business. I may have had some talk with Mr. Gorman — if 



132 [Senate 

I said anything to him it was if we advertise, the company would 
do it over its own name. I don't think he said that it was to be a 
campaign to educate the people to higher prices, but a campaign of 
education ^' as to the quality of milk and the necessity of the 
article in the household." Such a campaign of education would 
increase the demand, thus the dealer would be interested in it. 
I think this campaigTi of education was merely a matter to get 
some commission for Mr. Gorman. I don't believe in advertising 
in conjunction with others. I don't think Mr. Gorman said any- 
thing about the amount. Mr. Gorman said nothing to me about 
raising the price of milk. He talked about ultimately increasing 
the demand for milk. The public does not appreciate the value of 
milk ^' if there is one article in this world that goes on the table 
that they don't give any attention to it is milk." They don't ques- 
tion the price of any other goods. In the milk business there in- 
quiry always is, ^'' What are you charging? " Quality has nothing 
to do with their consideration. I am amazed that the mothers of 
the city do not take that into consideration, and the consequence is 
that the man who sells a good quality has to compete with a man 
who sells something that is absolutely unfit to use. The Board 
of Health has done much to improve the quality of milk and it has 
increased the expense to the dealer. Some milk is dangerous. I 
purchase the best milk I can get, and I did it when I started with 
one wagon and did the work myself, and we are running 150 
wagons today and are selling the best milk that is produced — so 
ai'e some others, and the small man can't compete Avith conditions 
that are existing today. He has to get it w^herever he can. Ho 
doesn't know where it comes from. It requires large capital. The 
milk business is improving, very much. The milk is skimmed be- 
fore it is shipped to the eity in some cases. Milk is one of the first 
articles that the public economize on. The reason why the small 
dealer has got to go is because he doesn't possess facilities for tak- 
ing care of the goods. Years ago, there was no municipal or State 
control. The producer shipped direct to individuals — a man 
with a horse and wagon. All kinds of milk was shipped to the 
city and delivered in all kinds of ways, and the farmer took his 
chances in getting his money. Conditions are changed. The first 
creamery for bottled milk in this country w^as built by the Alex. 



No. 45.] 133 

Campbell Milk Co., and the first glass bottle used for milk 
was put out by myself, and the glass bottles are used in every 
civilized country today. The large dealers assure the farmers a 
si.fe market for the product. I don't believe there was a dealer 
in Xew York who knew what the other was going to do about the 
advance in the price on Xovember first, except Borden. Some- 
thing had to be done to meet actual conditions and if you ^' stop 
milk for forty-eight hours, there would be a revolution." I don't 
know what others understood, but Borden's price had nothing to 
do with mine. I advance the price when I have to and I believe 
that intelligent thinking people are going to pay for a safe article. 
1 think the delivery expense is 2 or 3 cents a quart. (This state- 
ment corrected later to read : ^^ including everything and its dis- 
tribution, 4 3-8 cents in cool weather and in hot weather 5 cents 
per quart." Itemized statement : 

CENTS. 

Handling in the country creamery .375 

Freight to Jersey City .75 

Truckage to city creamery . 375 

Bottling and pasteurizing .25 

(I don't think that is quite enough for that item. Maybe 
a little too much on the others.) 

Bottles and caps .25 

Ice during entire handling . 375 

Delivery to trade 2 . OO 



4.375 



I wouldn't take all the wholesale trade in 'New York if you 
gave it to me. Freight charges and handling it in the creamery, 
carting it from the terminals to distributing points, are included 
in the three cent delivery charges. Milk was 12 cents during the 
Civil AVar, finally went down to ten cents and has stood at eight 
cents for a number of years. All things considered, it will cost 
six cents before you put the milk on the wagon at the distributing- 
station for delivery to the consumer, and one wagon can deliver on 
an average 175 quarts retail. The more milk you serve the less 
it costs to handle it in the retail delivery. I believe in a big 



134 [Sejs^xVte 

company handling it then you get milk ^^ that is safe to be sold; 
youi will not pnt it in irresponsible hands and you will get it for 
less money." My milk is practically all bottle milk. We bought 
the business of the Monroe Dairy Co. I think they owned one 
share in the Consolidated Exchange and we got it. It may be 
that my company owns fifteen shares of stock in the exchange. 
I cannot say that the clipping from the newspaper which you show 
]ne is a direct account of the earnings of my company. 

(Pages 450 to 458 covered by M. Scudder, accountant, financial 
report. ) 

All the Milk Exchange members would be unable to dictate 
prices in the country. We pay both above and below exchange 
prices. I would describe the exchange as a body of men who 
were called upon to appraise milk same as a body of real estate 
men are called on to appraise reial estate. They are a body of 
men who understand conditions — both conditions, both the pro- 
ducer and dealer — better than any other body of men. I am 
sure that they only come to an understanding after going over 
the situation what milk is worth. When we go up to the country 
and offer a price for milk, the farmers generally tell the agent, 
'' We would rather wait until we see what figures are put out by 
some of the other companies." I do not think the exchange ought 
to exist because I believe the price ought to vary as the quality of 
milk varies. The butter fat basis is the only basis on which to 
buy milk. The fixing of one price virtually puts a premium on 
a poor grade. Butter fat is the only test of value but in feeding 
children the first thing is to have the milk fresh. " The whole 
thing is settled before the Exchange ever reaches it or gets there.'' 
The meetings of the members of the Exchange and the fixing of 
the price of milk, gives the farmer an idea of what it is worth and 
in the vicinity of what he may expect to get for that grade of milk 
— namely, the ordinary run of milk. I think I bring in about 
1,000 cans a day, and I deliver about 30,000 quarts of bottle milk 
a day. The rest is made into cream. I think I sell about 1,000,- 
000 bottles a month. The price made by the Exchange might be 
regarded as an official price for certain kinds of milk. If milk 
had not been too low, an advance of one cent per quart would be 
too much of an advance. '^ We would be making too much 



IS^o. 45.] 135 

money." We would make our dividends in three months; if it 
goes wrong, we can lose that much money in three months. We 
sold milk during the first six months of 1909 and made $-19,- 
000. I never talked with anyone about what testimony was to 
be given by me at the examination. I believe that the average 
milk wagon delivers less than 200 bottles per day in !N^ew York. 
The reason why some wagons deliver more than others is because 
the customers are more compact. Where a large dealer can de- 
liver 400 bottles per horse and wagon the profits are greater. The 
$49,000 that I made in the first six months is not a criterion as 
to the net result at the end of the year. You might lose it all in 
the next six months. To show the difference in price and returns 
between the first and second half of the year, I submit the follow- 
ing: Beginning after June, July shows a profit, $8,'5'5'3.5'3 ; Au- 
gust, $4,300.81; September, $546.87, while October shows a loss 
of $10,169.87. I came to the conclusion that if our people wanted 
the goods that we were selling they would have to pay nine cents 
a quart. If the eight-cent had remained, there would have been a 
deficiency of more than $3,400 in ISTovember. This with the 
shortage of October would have wiped out the profits of the three 
preceding months. I had some conversation with Mr. Beakes 
^bout purchasing milk, but none about the testimony to be given. 
I might have talked about the price of milk, but never about an 
agreement to advance it, and may have talked about the desirabil- 
ity or even the necessity of advancing it. I don't think I said 
that I felt determined to advance the price — I may have said 
that I felt the necessity of it. I have collected a few figures show- 
ing the comparative cost and worth of milk and other articles of 
diet : 

1 lb. of Steak, costing $.22 

or 7 Eggs, costing .30 

or 3 lbs. Blue Fish, costing .60 

or 3 lbs Oysters, costing 1.29- 

is equal in food value to: 

1 qt. of Milk, costing. .09 

This table shows, what I believe is fully admitted, that milk is 
our cheapest food. When the expense attending its production, 



136 [Senate 

handling and delivery are taken into account, it is manifestly sel- 
ling below its intrinsic worth. And its price must be increased^ 
for it is subject to the same economic laws that govern all the other 
necessaries of life. 

The following statement will illustrate how every requisite for 
milk supply has advanced in price within the last eight years : 

t~. Percentage ot 

advance in S 

years omitting; 

1901 1909 fractions^ 

Truck horses, average cost $275 OOi $375 00 36 

Delivery Horses, average cost. 175 00 262 00 50 

Drivers' wages 12 00 17 00 41 

Inspectors' wages 15 00 19 00 2T 

Truck drivers 12 00 16 00 33 

Harness, per set 35 00 45 OO 29 

Oats, per bushel 41|- 60 45 

Research work . 2,000 00' 

Bottle caps, per 1,000 13 to .14 .23 to .50 7'7 to 255 

If the inquiry is carried still backward, we find the advance in 
price much greater. Fifteen years ago, oats, the chief feed for 
horses was selling at thirty-three cents per bushel. Last year they 
reached seventy. Twenty years ago the fe^d used in the produc- 
tion of milk was offered at $12.00 to $14.00 per ton. Today the 
same feed commands from $27.00 to $35.00 per ton. 

There are men in the milk buisiness that bring neither knowl- 
edge, ability or capital to it. They get milk at a low price — for 
quality is not in the contract — and this s-o-called milk is vended 
in the localities where cheapness is the deciding feature and clean- 
liness and purity are unmeaning terms. Should this class of 
.dealers be obliged to compete with men who bring their experience 
and expend their money not only for the purpose of making a 
financial success but also for the satisfaction of knowing that they 
have contributed to the health of the community whom they serve ? 

LuTHEE L. Campbelt. : 

I reside at 2288 Broadway. I am at present in 
the milk business, and have been for nineteen years, 
incorporated under the name of the Clover Farms Company ; in- 



:N'o. 45.] 137 

■corporated under ^ew York laws. I am president of the com- 
pany. John A. Weissenfiih is secretary and treasurer of the 
company. J. P. Smith is a director. He lives at 2290 Byroad- 
way. I own two-thirds of the capital stock, incorporated at 
$51,000. The stockholders are Weissenfuhm, J. P. Smith, Emile 
Guermonpez, and Mrs. L. L. Oampbell. We have not paid any 
dividends in the past three or four years. We pay about $132 
per week in salaries. We have three stations in the country; 
one is Slate Hill ; one at Shekomeks, ^. Y., and another at 
Staatsburg. Our main office in the city is at 534 West 48th 
street. We have a branch office at 618 (E'ast or West) 131st 
street. I have several stores; one at 2288 Broadway; one ^at 268 
Columbus avenue; one at SStJi street and Columbus avenue; one 
^t 912 Park avenue; one at 827 6th avenue; at 1015 6th avenue; 
152 East 86th street; 100th street and Broadway; 138th street 
and Broad\vay; 145th street and Broadway; I79th street and 
Broadway; 182d street and St. Nicholas avenue. I also sell in 
these stores butter, eggs and jellies, and things like that. I only 
sell in 'New York state. I am a member of the Consolidated Milk 
Exchange, owning two shares of stock. I have never been an 
officer or director. I never attended any meeting of the stock- 
hiolders or directors of the consolidated. All the reason I bought 
stock in the Consolidated Milk Exchange was to keep in touch 
with the trade. I can't say as I have derived any benefit. I 
would be informed of the value arrived at by the consolidated 
through the Milk Reporter, and a postal from the Milk Reporter. 
It has never been of any particular value to me, unless I had 
more milk than I coiild use and would try to sell it. I would 
have something to base my figure upon. I have had both written 
and oral contracts with the farmers from whom I purchased 
milk. Our oral contract with the farmers was simply a. states 
ment that we were going to pay such and such a price and if they 
were willing to accept it we would take the milk. The prices that 
we paid were the regular prices that we got from the Milk Re- 
porter. We would not pay that price, but we based our price on 
that. Sometimes above and sometimes below. The milk I buy 
now is based on Borden's prices. I think Borden's price is more 
generally used than the exchange price, at present. It is as far 



138 [Senate 

as I am concerned. The prices that I am putting out now at the 
creameries is according to the quality of the milk in the first 
place, using Borden's price as a basis. We pay above Borden's, 
prices for a good deal of our milk, but the exchange at the present 
time is not entering into it. I never heard that the board of 
directors of the consolidated in any way fixed the price of milk to 
the consumer. I raised the price of bottled milk from eight ta 
nine cents a quart on or about ]^ovember 1, 1909. I do no^t sell 
dipped milk. I am serving Dennett's restaurant at wholesale. 
The general conditions caused me to raise the price. I knew that 
we would lose money at eight cents ; that is the principal reason.' 
Lordens sent out a notice about the twenty-eighth or twenty-ninth 
of October to the effect that on the first day of IN'ovember the 
price of bottled milk would be raised. That is one reason why 
I did it. I have discussed the desirability of raising the price of 
milk, not only with my own firm, but with other people. I 
can't recollect with whom I talked. I did not enter into an agree- 
ment with any person whether written or oral to raise the price. 
I do not remember about the campaign to educate the public 
into paying higher prices; although it seems to me now that T 
heard something talked about getting the dealers' side of the 
story printed in the papers. The milk business has been trampled 
on by a lot of things, l^ow we have been persecuted from all 
hands. They had the people so frightened that they did not 
dare to use milk. It was to eliminate from their mind that they 
were using something that was not fit to use, all the tuberculosis 
scare, et cetera. People were afraid to drink milk. If my mem- 
ory serves me right it was not to raise the price. I am a stock' 
holder in the Dairymen's Manufacturing Company. I bring be- 
tween 450 and 500 cans containing forty quarts each to the city 
every day. I do not belong to the Milkmen's Protect ivo Associa- 
tion. 

A statement received in evidence, marked exhibit 4-a, show- 
ing the prices paid for milk per quart during the various months 
covering the period 1908 to 1909: 

Dec., 1907 04 Jan., 1908 04 

04 1/4 04 1/4 

\.... .04 1/2 04 1/2 



No. 45.] 139 

Jan., 1908 03 1/2 Sept., 

March, 1908 03 33/40 Oct., 

03 1/2 

04 3/40 

03 1/4 

08 1/2 Nov., 

April, 1908 03 2/5 

03 

03 1/4 

.03 13/20 

03 

02 3/4 

0'8 1/2 Dec, 

May, 1908 027625 

030125 

02 3/4 

02 1/2 

02 1/4 Jan., 

08 1/2 

June, 1908 022125 

02 

08 1/2 

July, 1908 .0265 Feb., 

02 1/2 

...... .029 

02 1/4 

08 1/2 

Aug., 1908 0287 

03 March, 

.0312 

02 3/4 

08 1/2 

Sept., 1908 03185 

03 April, 

03 1/4 

03685 

02 3/4 

03 



1908 08 1/2 

1908 03612 

04112 

03 3/4 

08 1/2 

1908 040385 

03 3/4 

04 

045385 

03 3/4 

04 

08 1/2 

1908 040385 

04 

045385 

04 

08 1/2 

1909 040385 

045385 

04 

03 3/4- 

03 1/2 

1909 040385 

0450385 

03 3/4 

..... .03 1/2 

03 1/4 

08 1/2 

1909 036125 

041125 

03 1/2 

.03 1/4 

08 1/2 

1909 031875 

..... .036875 

03 

.02 3/4 

08 



140 



[Senate 



May, 



June, 



July, 



Aug., 



1909 


. .02656 


Aug., 


1909 


. .08 




. .03156 


Sept. 


1909 


. .030812 




. .02 1/2 






. .035812 




. .02 1/4 






. .03 1/2 




. .08 






. .03 1/4 


1909 


. .02106 






. .08 




. .03156 


Oct., 


1909 .... 


. .040375 




. .02 1/2 






. .045375 




. .02 1/4 






. .03 1/2 




. .08 






. .08 


1909 


. .0255 
. .0305 

. .02 3/4 
. .02 1/2 
. .08 


Nov., 


1909 


. .025 
. .0475 
. .03 3/4 
. .04 
. .08 


1909 


. .0^28687 


Dec, 


1909 


. .04356 




. .033687 






.. .04856 




. .03 






. .03 3/4 




. .03 1/4 






. .04 




. .02 3/4 






. .08 



J. G. Walsh collected cans for me. I think I paid him ten or 
fifteen cents per can. William Schaus also collected. 'No one 
came to me and represented himself to be from the Milk Dealers 
Protective Association. I have never been a member of the Milk 
Dealers Protective Association. I have never paid any money 
into the Protective Association. The price, eight and one-half 
cents per quart, that appears on the statement is what I received 
for certified milk. That is milk that is indorsed by the County 
Medical Society, and has to be of a certain standard of butter 
fat and stand certain bacterological tests. I buy the certified 
milk from C. W. Knight of Rome, I^. Y. In my contract, such 
as I brought here, at the present time I fill in Borden's prices. 
Last year it was Borden prices in one creamery and five cents 
below their price during the month of June at the other one. 



'No. 45.] 141 

MANAGER PHOENIX CHEESE COMPANY. 

Linn E. Carpenter: 

I reside at 108 North Nineteenth street, East Orange, N. J. 
My principal business is manager of the Phoenix Cheese Com- 
pany. The Plioenix Cheese Company is a corporation engaged 
in the cheese business. The legal office is at ^South Edmeston, 
N. Y. New York office is 345 Greenwich street. Some time, I 
think in October, I made a contract with the Harlem Dairy Com- 
pany. I think it was to cover until April 1, 1910. It was a writ- 
ten contract. By that contract I agreed to supply Miller with 
forty to sixty cans of milk each day, at a price. A Mr. J. Smith 
came to me to get me to cancel that contract, a customer whom 
we are now serving with milk. There were two other gentlemen 
with Smith. They asked me if I was selling milk to the Harlem 
Dairy Company and I told them that I was. They asked me if 
there wasn't any way that I could stop supplying them with milk, 
and I said to them that I couldn't see how in as much as I had 
a contract with them, and they said, '' Why contracts are easily 
broken." I said, ^' I didn't make them for that purpose." " Well, 
they said, we could ship the party sour milk for a few days and 
he would not want any more milk." I immediately told them 1 
was not in that kind of business. One af the gentlemen said, 
'• Well, I hope I am not misunderstood." That they did not in- 
tend to bring anything to me that was wrong; that they knew I 
was a square man but they wanted a square deal. Of course, I 
resented the statement when they wanted I should breaJi the con- 
tract and they saw the force of their argument was gone, and they 
tried to make amend for it. I told them that if the gentlemen 
whom we were selling milk to was selling below a price which was 
was profitable, I would do anything that was just and reasonable 
in my power to see if I could prevail upon them to get a reason- 
able price for his milk, but further than that I could do nothing. 
I think they stated to me that Miller or the Harlem Dairy Com- 
pany was selling below the Association price. I never saw these 
gentlemen, but that time. Smith called upon me several times. 
Smith told me that he had a telephone conversation with them. 
He didn't say who, and said that they were prepared to offer me 



142 [Senate 

$1,500 for that contract that I had with the Harlem Dairy Com- 
pany. I told them I would see the Harlem Dairy Company and 
1 did. They sia^id they would not sell it under any circumstances 
or any consideration, and I said, '' Haven't you got a price on 
which you would sell it ? " They said, " No." They said they 
might sell their business. I said, ^^ Well, what would you take 
for your business ? " If I remember rightly, they said $6,000. 
I imparted that information to Mr. Smith. I had a conversation 
with Mr. Beakes, who was on the stand to-day. I think the first 
conversation was over the phone. Mr. Beakes called me up and 
said, " These fellows have asked me to come down and see you 
in regard to this man Miller. He is doing a lot of mischief up 
here bothering our boys to beat the band. They say you have got 
a contract with them but it seemed to pacify them a little if I 
would come down and see you." I said, " I should enjoy having 
you come down anyway, if you care to come down." A few days 
later he called me again ; he came down that afternoon and asked 
me if we were selling milk to the Harlem Dairy Company. I 
said, ^' Yes." Handed out the contract and showed it to him — 
exactly what arrangement we had made with them, and the amount 
of milk. " Well," he says, " I don't see but what you will have to 
sell them the milk, Mr. Carpenter." I said, '^ I don't see any 
other way, Mr. Beakes." I said, '' You understand, do yon, that 
they would take $6,000 for their business." He said, " Do you 
know, they have nothing to sell." ^ I am a farmer as well as a 
milk dealer. I have no figures showing the cost of production of 
a quart of milk throughout the year. I know nothing about a 
price established by the members of the Milk Dealers Protective 
Association. I never had but one written contract. My concern 
sells from one hundred to three hundred cans of milk in a day. I 
supply different dealers and when I found the condition was such 
that I had to adH^ance or lower my price, I did so. I think the ad- 
vancing or lowering of the price was governed by the value set 
upon it by the Exchange, but I did not attempt to follow implic- 
itly the value which they fixed upon milk. I have sold below and 
above their price. I dare say, the price established by Borden's 
would also effect the price at which I sold. I can give you what 
we paid for milk for the last six months and what we received per 



Ko. 45.] 143 

can for it. All are f. o. b. shipping station. And further I wish 
to state that in these figures there is no expense. This is simply the 
gross profit Avhich I am showing. Loss of cans, bad diebts or any 
expense of station is not considered in any way. In July we sold 
milk from our shipping station at $1.10. We i>aid for that -milk 
^1.10 a hundred. Profit of 16% cents a can. In August paid 
$1.20 and sold it for $1.20 a can, or a profit of 23 cents a can. 
In September we paid $1.40 and sold it in isTew York for $1.45 or 
26 cents per can. For the month of October we paid $1.55 and 
sold it for $1.75, profit of 6% cents a can. For month of E'ovem- 
ber we paid $1.85 and sold it for $1.65, profit of 12% cents a 
can. For month of December paid $1.90 and sold it for $1.75 
per can or a gross profit of 13V2 cents a can. The first item was 
the price per hundred pounds. The second figure was the price 
per forty quart can. The Consolidated Milk Exchange has never 
made any attempt to prevent me from selling milk to dealers in 
this city, as I have sort of a surplus product, and they could not 
compete with me in price. I think the Exchange has its advan- 
tages. I think that a body of men getting together from different 
sections of the country, understanding and expressing their views, 
as the conditions exist in that section, shows to that body what 
the supply of milk is. That same body, naturally that is in the 
business, knows the demand for that milk. They become better 
acquainted as to the real true condition existing and can fix a 
price at which they could sell their product. I think that price 
has some influence. I know that personally if I were going into 
the city of 'New York to sell milk I would have no means of getting 
knowledge as to the supply or the demand that the value that I 
might place on that product might be way out of reason. I might 
have paid too high for it in the country and might offer it too 
low. I think it is very desirable to have some standard of com- 
parison in addition to that established by Borden's. I am not a 
member of the Milk Exchange. I know what method they adopt 
in arriving at these values. I have attended one or two meetings 
of the Exchange by invitation. I think the meetings that I at- 
tended were very thoroughly discussed, each man expressing his 
views as to the condition in this locality, and expressed whether 
his milk was shrinking or whether he was having a surplus. How 



144 [Senate 

Lis trade was increasing or falling off, and then I believe a vote 
was sometimes taken as to different views, what the price should 
he — what would he the real value of milk. 

Henry S. Chardavoyne : 

I reside at 14 Eirst place, Brooklyn. I have been in the milk 
business about twenty-four years. x\m in the businesis individ- 
ually, l! haive srtiatioujs at M'cAfee and "Wooid,Tuff Giap, l^ew 
Jersey, and Jackson Summit, Pennsylvania. I have a store in 
this city at 406 Court street, Brooklyn. I sell my milk in i^ew 
York iState solely. I am a stockholder in the Consolidated Milk 
Eixehange. I own five shares. I am not an officer or' director. I' 
was inispector of election. I am not an officer, director, or stock- 
holder of Borden, Sheffield or the Mutual companies. I have 
attended meetings of the stockholders and directors, of the Con- 
solidated at 6 Harrison street and in Jersey City. I never heard 
that tliey dealt in milk. I don't know the objecti of the Consoli- 
dated. I don't know why I belong to it. I purchased the stock 
which I own. I don^t think the meetings' of the board of direct- 
ors of the Consolidated were entirely useless. They foiund ai 
value of milk and a number of other things. I pay twenty-five 
cents a year to get the card from tihe '^ Milk Reporter " and prob- 
ably receive from ten to fifteen cardte each year. I never heard 
of any penalty levied on tlie members of the Consolidated if they 
did not live up to the prices established by the board of directors. 
I do not go by thei Exchange prices. I buy it from thei farmers. 
as cheap as I can and sell it for all I can. When I purchase milk 
in the country, farmers demand of me a certain price, the Ex- 
change price, if possible — the farmers called my attention to it.. 
When I give them their option. Exchange or Borden, they all 
take Exchange. The contract which we have provides for every 
change fixed by the Exchange, a corresponding change shall take 
place in the price that we pay the farmer, or if Borden make a. 
price for six months, I pay the same. I never heard that the 
Consolidated Exchange ever fixed the value or price of milk that 
should be charged by its members to the consumer. During 1908^ 
we bought at part Borden and part Exchange prices; in 190'9j. 
it was Exchange. At one creamery^ the price isi regulated by^ 



No. 45.] 145 

what my neighbors pay. Whatever price he pays the farmer I 
pay the same. Another creamery buys on the Babcock test, that 
is the butter fat in the milk. If butter is forty cents a pound, 
and 100 pounds of milk will test four pounds for the hundred, 
I pay ten cents more per pound than the butter is selling for, 
making two dollars per hundred for 4 per cent, butter fat milk. 
This is at Jackson Summit butter manufacturing station. When 
I am short of milk down here, I receive some milk from that sta- 
tion. I raised the price ^November 1st from 8 cents to 9 cents 
for bottle milk and I sell a couple thousand bottles a day. I sell 
about fifty cans of milk. Canned milk is sold to the wholesale 
trade. I advanced canned milk 10' cents a can. I had no discus- 
sion with anyone in reference to the necessity of advancing the 
price of bottle milk at that time except with my own employees. 
Borden's price influenced me to advance the price on November 
1st. One of my men brought in one of their cards on Saturday, 
saying that they had advanced the price. I followed Borden 
because he was my largest competitor. I try to get all of his 
business that I can. Members of the Consolidated Exchange 
also compete with me. R. S. Stevens Company, Empire State 
Dairy, McDermott Dairy Company and Diamond, everyone of 
them, come into my territory and try to undersell me. A driver 
of the McDermott Dairy Company went in and offered a lady on 
my route milk for one week free if she would deal with them. 
The lady came and told me personally. She was a customer of 
mine. I used to get 8 per cent, dividend on my stock in the Con- 
solidated Milk Exchange. I don't know Gorman. No one ap- 
proached me in the year 1909 with a proposition to subscribe a 
certain amount to a campaign of education. I raised my retail 
price in 1907 from 8 cents to 9 cents and reduced it in the spring. 
Shortage compelled us to raise in 1907. We could not get milk 
emough. We charged 9 cents about three months at that time. 
We have never entered into any agreement wi*itten or oral, to 
raise the price of milk in 1907 or 1909. I am a stockholder in 
the Dairymen's Manufacturing Company. I am not an officer 
or director. 



146 



[Senate 



Mr. Cochran: 

I reside at East Orange. I am superintendent of the 
route department, or citj delivery of the Borden's Condensed 
Milk Company^ and have been such since October, 1906. Pre- 
vious to that I was assistant superintendent, before that as a 
superintendent of one branch, and before that as inspector, and 
before that as a driver. Statement shov^ing items that make up 
the cost of bottled milk as it v^as sold by nay company in the 
month of December, 1909, received in evidence as follov^^s: 

' " Cost — Eastern Branches 
Month of December, 1909. 

Cost per quart for fluid milk used. .043B 

Labor, fuel, miscellaneous expense, country and milk 

freight . .016471 

Labor, (city), uniforms, ice, horseshoeing, bottle caps, 
repairs, accident payments, advertising matter, sta- 
tionery — eity and country, furniture, waste and 
gifts — city, feed and bedding, repairs to wagons and 
harness, bottle loss, and horse depreciation . .0i279'91 



.0&8262 " 



2.15 pounds of milk make a quart. During the month of 
June, 1909, I paid $1.05 per hundred pounds. That would be 
2.267 per quart. 

" Prices paid by Borden's Condensed Milk Company to farmei^s, 

1908 and 1909, as compared with Exchange prices:" 

(Prices paid by Exchange obtained from ^^ Milk Reporter.") 



1908 


Exchange 
Per qt. Per cwt. 


Borden's 

Price 
Per cwt. 


Borden's 

Plus or Minus 

Exchange 

Plus. Minus, 


January . . . . 


.04000 


1.860 


2.00 


.140 


February . . . 


.03750 


1.744 


2.00 


.256 


March . . . . 


.03500 


1.62'8 


.80 


.172 


April* 


.03124 


1.453 


1.60 


.147 



ISO. 45.] 



147 



1908. 


Exchange 
Per qt. Per cwt. 


Borden's 

Price 

Per cwt. 


Borden's 

Plus or Minus 

Exchange 

Plus. Minus. 


May* . 


.02621 


1.219 


1.30 


081 


. . . . 


June* 


.02250 


1.046 


1.05 


.004 


. . . . 


J^^ij 


.02500 


1.163 


1.25 


087 


. . . . 


August .... 


.03000 


1.395 


1.35 


. . . 


.045 


September. . . 


.03125 


1.453 


1.50 


.047 


. . . . 


October . . . 


.03750 


1.744 


1.70 


... 


.044 


I^ovember. . . 


.03833 


1.783 


.90 


.117 


• . . . 


December. . . 


.04000 


1.860 


1.90 


.040 


.. . . 


1909 












January. . . . 


.03910 


1.819 


1.90 


.081 


. . . . 


February. . .. 


.03634 


1.690 


1.90 


.210 


. . . . 


March 


.03500 


1.628 


1.70 


072 


. . . . 


April* 


.03125 


1.453 


1.60 


147 


. . . . 


May* 


.02670 


1.242 


1.25 


008 


. . . • 


June* 


.02250 


1.046 


1.10 


054 


. . . . 


July 


.02750 


1.279 


1.20 


. . . . 


.079 


August .... 


.03129 


1.455 


1.35 


> . . • 


.105 


September . . 


.03500 


1.628 


1.45 


. . . . 


.178 


October .... 


.03750 


1.744 


1.90 


.156 


• • « t 


^NTovember . . . 


.04050 


1.884 


2.00 


.116 


• • t « 


December . . . 


.04250 


1.997 


2.05 


.0173" 






The cost set forth in the exhibit previous to the above is what 
we pay the producer direcctly for milk. Exhibit 5'-A is as follows : 



(( 



Labor, fuel, miscellaneous expense, country and 

milk freight 016471 " 



In 1907 the price of condensed milk was raised at the time the 
price of bottkd milk was raised. I believe the average price I 
paid the producer in 1909 was slightly less than I paid in 1908. 
I use separators in my creameries at South Worcester, Daven- 
port, Delhi, Hamden, Elk Creek, Canaan, Hopewell Junction. 
The separators are used for making cream and for the purpose 
of cleansing or purifying the milk. We make casein from the 
skim milk. We have never used the separator to make a milk 

* Surplus months. 



148 [Senate 

that will run 3 per cent butter fat. I saw Mr. Beakeis on Friday 
before thei first of November and I do not know wbether lie said 
something or not about raising the price of milk. I believe he 
said scmething that, led me to believe that he might poissiblj talk 
on that subject, and I told him that he knew that I had not any- 
thing to do with the' price of milk, and he said he knew I didn't* 
That was all the conversation we had on the price; of milk. He 
said the price to customers was low or something of that sort. He 
dtecided on the week before the first of I^oveimbecr and Mr. Rogers 
called me up and told me that they had decided to raise the price 
of milk and he told me to be very careful about letting anybody 
know until we got ready, just time enough to gi^^i the customer 
notice that it would be; raised, and only one young man in our 
office knew it except, myself, and I had to take him into my con- 
fidence to get the cards printed. The printer had two sets of men 
on the cards ; one made up the body of the card and the other put 
in the price, and he w^as a confidential man that he had confidence 
in. The superintendents came to the Hudson street ofiice without 
knowing what they came for on Friday at three o'clock, and they 
wei^e to deliver those cards to the drivers the next morning them- 
'selves, so that nobody would know until the customer knew. 
There is a good reason for this secrecy. If the other dealers knew 
that we were going to raise the price very long before they did, 
they would probably bother our trade. We have always had an 
idea that our milk was worth more than other people's milk; 
consequently we think that the customer is willing to^ pay more. 
Our veterinary service and inspecting service in the country has 
a great deal to do with it. Also the fact that our milk is bottled 
in the country. The card which we sent out to inform the people 
that the price of our pure fiuid milk will be advanced to 9 cents per 
quart on Monday, November 1, 1909, signed Bordens Condensed 
Milk Company. Our company is not a member of the Milk 
Dealers Protective Association, and I have never heard of it 
until I read thisi testimony here. We pay a member of the Brook- 
lyn Milk Bottlers Association $400 per year to collect our bottles. 
Our bottles are marked with their capacity. We have been very 
careful with our glass dealers. Our contract is that the capacity 
of the quart bottle must be not less than 31.6 drams, or over 32.2 



Xo. 45.1 149 

drams, and should they be more, they take back the bottles. That 
gives the customer a full quart of milk, provided the bottle is full 
to that point. I think it is for the benefit of the customer to know 
whether he is getting a full quart of milk or half pint of milk 
or a pint of milk. For this reason we have had the capacity 
blow^l in the bottle. We are charging 8 cents for country bottled 
milk in Chicago. A list showing the pricets charged by various 
milk companies in various cities of Canada for milk received in 
evidence is as follows : 

PRICE OF FLUID MILK IN BOTTLES REPORTED TO 
PREVAIL m OTHER CITIES. 

Per quart. 

Montreal, Canada: 

Half bottled in city ; balance at dairies, three miles 

outside of the city ; sold for . 9c 

Scranion, Pa. : 

Two dealers bottle in the country ; one sells at ... . 9c 

The other at 10c 

Phiiadelphia, Pa: 

About ten per cent of supply bottled at the farm, 

sells for 10c 

One dealer supplying West Philadelphia, bottling 

at Kennett (just outside of city limits) sells for. 8c 

Baltimore, Md.: 

All milk bottled in the city ; sold at 9c and 10c 

Buffalo, N. Y.: 

Only one dealer bottles at dairy ; sells for 12c 

Albany, N. Y.: 

One dealer bottles at dairy (claims milk is cer- 
tified) and sells at 14c 

Boston, Mass.: 

Milk bottled at farm sold by four dealers, at lie to 20c 

Milk used at Agricultural State Farm sold at. . . 16c 

Three of the largest dealers, bottling in Boston, 

sell at 9c 



I 



150 [Senate 



T' Per quarts 

Providence, R. I.: 

Thirty-six bottle at the farm and sell at 7c and 8e 

Majority sell at ■ 8e 

Lowell, Mass. : 

Two dealers bottle at the farm ; sell for 7c and 8c 

Manchester, N. H.: 

Two dealers bottle at the farm ; sell some for 8c 

But most is sold at 10c 

Lawrence, Mass.: 

Milk bottled at the farm ; sells for 7c and 8c 

Medford, Mass. : 

Sixty-two milkmen in this town ; sell for 8c and 9c 

Portland, Me.: 

Bottled in the city ; sells at 8c 

Hartford, Ct.: 

Farmers bottle at farms near town ; sell for 8c 

Springfield, Mass.: 

Bottled in the city ; sells for 9c 

Portland, Me.: , . 

Bottled in the city ; sells for 8c 

Norfolk, Va.: 

Milk bottled at dairies near city; not sold for less 

than 10c 

Washington, D. C. : 

All milk bottled in the city; sells for. 9c 

Charleston, S. C: 

Uniform price, milk bottled in the city 10c 

Wilhes-Barre, Pa.: 

Milk bottled in the farm ; sells for. 10c 

St. Paul, Minn.: 

Milk bottled in city ; sold for 7c 



Ko. 45.] 151 

Per quart. 

Minneapolis, Minn. : 

Milk bottled in the city ; sold for 7c 

New Orleans, La.: 

All milk bottled in the city; sells for 10c and 12c 

Pittsburg, Pa.: 

Some bottled in the country, most in the city ; sells 

for 9c and 10c 

Jachsonville, Fla.: 

Eottled at dairies '* in immediate neighborhood '' . . 12c and 15c 

Syracuse, N. Y.: 

All bottled in the city sold for 7c 

Salt Lake City^ U.: 

" So-called sanitary product, in bottles ;" sells for . . 10c 

Atlanta, Ga.: 

Practically all milk bottled in the city ; sells for . . . 10c 

Omaha, Neb.: 

All milk bottled at the farm ; sells for 10c and 12c 

Quebec City, Can.: 

Milk bottled in the city; sells for i 10c 

Toronto^ Canada: 

Milk bottled in the city; sells for , 10c 

San Francisco, Cal. : 

Milk bottled at the dairy under sanitary conditions. 15c 

Milk bottled in the city; sells for 10c 

Oakland, Cal.: 

Milk bottled in the city ; sells for lie 

Alameda, Cal.: 

Milk bottled in the city ; sells for lie 

Berkley, Cal.: 

Milk bottled in the citv ; sells for lie 



152 [Senate 

Per quart. 

Cleveland, Ohio: 

All milk bottled in the citj; sells for 8c 

Birmingham, Ala.: 

Milk is bottled at dairies just outside of the city 

limits, and brought in on wagons ; sells for 10c 

Memphis, Tenn.: 

Bottled at dairies adjacent to the citj and brought 

in on wagons and delivered 10c 

Rochester, N._ Y.: 

Put up at the dairy, claimed certified 10c 

Los Angeles, Cal.: 

Bottled at the dairy ; sells for , 10c 

8t. Louis, Mo.: 

Bottled in the city; sells for . 7c and 8c 

Kansas City, Mo.: 

Bottled in the city ; sells for 10c 

Butte, Mont.: 

Little sold in bottles ; that which is, is bottled near 

Butte and brought in ; sells for 10c 

Missoula, Mont.: 

Milk collected by wagons ; some bottled in city ; sold 

twelve quarts for $1.00, or, per quart. , ■■ 8%c 

Great Falls, Mont.: 

Milk brought into the city on wagons and usually 
delivered in bulk; bottles carried for special 
customers 8I/3C 

It is my personal opinion that the least handling you can do 
with milk the better. Consequently we bottle it in the country 
and it is away from air and atmosphere and dust until the cus- 
tomer gets it from very shortly after milking. The sooner you 
get milk in the bottle, the better; and if it 'is closed up from, the 
time it reaches the country until it gets here, and thoroughly iced 



No. 45.] 153 

on the way down, it is about as fresh as you would get it in the 
country. The object of pasteurization is not to freshen the milk 
in any way, but to kill the germs that might be injurious. I 
think about 120 will kill lactic bactera and they are very helpful 
to the milk instead of detrimental. They say about 145 for 30 
minutes and 155 for 20 minutes to kill pathogenic bacteria but 
we try to have no pathogenic bacteria in our milk. Many phy- 
sicians claim that during the process of pasteur ization the casein 
is hardened and therefore made less digestible. I have never had 
a discussion with Mr. Beakes or any of those gentlemen in refer- 
ence to raising the price of milk. 

William B. Conklin: 

I reside at 250 West Eighty-fifth street. I am president and 
treasurer of the Orange County Milk Association. I have never 
been engaged in the milk business on my own account. I am 
also a director. We are organized under special charter; Acts of; 
1860. I first became associated with them on April 1, 1876. We 
buy and sell milk ; manufacture condensed, and we bottle ordinary 
fresh milk. The stock is $100,000. I own 234 shares; par 
value $100. In 1907 and 1908 we paid 8 per cent, dividend. In 
1909 we paid 5 per cent. I think in 1906 we paid 7 per cent. 
In 1905, 6 per cent. We own four dairies in the country; con- 
densery at Fultonville, Montgomery county ; condensery at Goshen^ 
Orange county ; receiving station at Goshen, Orange county, and 
a bottling station at Price's cirossing, betwteen Wajrwick and 
Vernon, in l^ew Jersey. The principal office is at 146 West 
Twenty-fifth street; branch office at 106 East One Hundred and 
Twenty-sixth street, and 421 Classon avenue, Brooklyn. I am a 
stockholder of the Consolidated Milk Exchange. The stock is 
in my name. It belongs to the Orange County Milk Association. 
1 am not a member of the Milk Exchange Limited. I should 
say I became a member of the Consolidated about eight or ten 
years ago. I am a director of the Consolidated Milk Exchange; 
also vice-presideut at the present time. Director about three 
years; vice-president about two years. I do not own stock in 
Borden, Sheffield, or the Mutual Company. About 85 years ago 
T was an employee of Borden's Condensed Milk Company. I 
do not own stock in any other corporation engaged in the milk 



154 [Senate 

business; neither am I an officer, director or employee. The 
directors' meetings that I have attended have been held at 'No. 6 
Harrison street, and part of them in Jersey City. The. Consoli- 
dated Milk Exchange does not buy and sell milk. I understand 
the object of this Exchange to be the expression of opinion as to 
values of milk. There are other matters that come up before 
them ; matters of transportation, cans, matters of legal aif airs that 
come up, and might be connected with the milk business, as Mr. 
Laemmle stated. In arriving at the value of milk, if there is a 
quorum present an informal ballot is taken to get an expression 
of the conditions as they prevail in different sections; the Board 
is represented by men from different sections ; we have men from 
the country, and men from New York in the milk business that 
are also farmers and connected with other concerns. An informal 
ballot is taken to arrive at the consensus of opinion of that Board 
as to the value of milk to-day. '^ ISTow, after that informal ballot 
has been taken and recorded, then a formal ballot, a motion for a 
formal ballot is made and duly seconded. After that is done, as 
vice-president of the Exchange and as chairman of the price com- 
mittee at that time I ask each member around the Board how he 
has arrived at his conclusion. John Jones may tell me why he 
did. Samuel Jones may say, ' I have nothing to say.' But I give 
every man around the Board an opportunity of expressing his 
opinion as to the conditions and why he states that the price should 
be advanced a quarter or a half or should be lowered a quarter or 
a half. ]!^ow, after that is done, then the motion is put and re- 
corded then and there as to the Exchange — the Exchange finds 
the value of milk to be to-day such a price. That isi exactly what is 
done.'' When an informal ballot is taken at the meeting, little 
slips of paper are distributed among the seventeen directors. On 
that slip the man makes a figure, 1.71, 1.81, etc. He folds it up 
and it is taken up and the ballots^ are collected by the clerk and 
counted. He finds there are 14 ballots or 17 ballots, 15 of which 
are for 1.71 and 2 for 1.51 or 1.61. Then a motion for a formal 
ballot is made. Then after a motion for a formal ballot 
is made, as vice-president and the Chairman of the price 
committee, I ask this man how he arrived at that particular figure. 
I ask around the Board until it comes to the last man, and each 



jSTo. 45.] 155 

one expresses their opinion how they arrived at that figure, which 
was based upon the conditions as they saw it, as they met them in. 
the country or they saw it in the city. Then they have new slips 
for the formal ballot. Xow, some of them, after listening to what 
each one has said around, they may conclude that their informal 
ballot was wrong, their opinion had changed by the statements 
that have been made. This formal ballot decides it. The number 
in the majority decides the final value. I announce then, that 
as the price for the time being, and I so announce to the presi- 
dent of the Exchange, who then takes my place in the chair and 
makes the formal announcement to the Board. As far as I am 
concerned, the values w^hich were arrived at were of no use. I 
went down to these meetings to gratify some men that wanted me 
as a director and as an officer. I have heard different ones claim 
that the fixing of value benefited them in their arrangement in 
the creameries of the country. I am a subscriber to the ^^ Milk 
Iieporter." From a memorandum I have I can state that the 
average cost of our milk at the present time is 4^/4 cents per 
quart. That is bottled milk. That is the price we pay the farmer. 
The freight is 1% cents ; bottling, % of a cent ; carting, i/4 ; de- 
livery to the consumer, 1% cents ; ofiice help and extra riders in 
case of sickness, IV2 cents; that is 9% cents. This does not in- 
clude wagon repairs, extra bottles or rent. This is for the month 
of December. I think the lowest I have bought milk in June is 
for 2V2 cents. We pay the highest price during December and 
January. I^eaving out the cost of the milk, I think it costs us 
about 5 cents to handle it. There is a difference between freight 
on raw milk and bottled milk. The freight rate on canned milk 
depends on the zone that it is in. We pay 32 cents freight, can 
rate. I think it is about 42 cents bottle rate. The Orange County 
Milk Association raised the price of bottled milk from 8 cents to 
9 cents on Xovember 4th. I fixed this price without consulta- 
tion with any of the Board of Directors. I might have consulted 
with some one engaged in the milk business, in a casual way, 
previous to Xovember 4th in reference to this proposed advance 
in the price of milk. I couldn't say with whom I discussed it. 
Possibly I attended meetings at which the raise was discussed in 
October; I couldn't say off hand. There Avas no other business 



156 [Sejn^ate 

transacted at the meeting. There was never any resolution passed 
by the members of the Board of Directors of the Consolidated 
Milk Exchange, at which I was present, in which the members 
were in any way advised or directed to advance the price of milk 
from: 8 cents to 9 cents. I know of no reason why all advanced 
the price at the same time. I never signed any agreement with 
other dealers to advance the price. I had to advance it myself 
in order to save my company from ruin. We did, prior to the 
advance of price on E^ovember 4th — I did — talk with other 
dealers as to the desirability of it. I do not know Mr. Gorman^ 
the newspaper man. I turned down the representative of the 
newspaper, in reference tO' starting a campaign of education. I 
dcn't recollect what I said to him. I met him at ISlo. 6 Harrison 
street, at one time, but asked to be excused as soon as he com- 
menced talking to me. Individually I am a member of the Mutual 
Aid Society. Our company is interested in it. Our company is 
a stockholder in the Dairymen's Manufacturing Company. I am 
not an officer or director of that company. There were some 
special meetings of the Consolidated Milk Exchange that were 
called for the purpose of considering the value of milk. I bring 
from fifty to sixty cans of loose milk to New York per day, and 
about 350 cases, 12 quarts to a case; also from 75 to 150' cans 
of condensed milk (40 quart cans). I do not remember writing 
a letter to the Consolidated Milk Exchange or its Board of Di- 
rectors about August 29, 1908. 

(The following letter appears in the minutes of the board of 
directors of the Consolidated Milk Exchange of the meeting held 
August 29, 190-8:) 

^'A letter from our first president, W. B. Conklin, was received 
and read to the meeting, in which the writer expressed his hopes 
that the directors will make good use of their usual good judg- 
ment in finding the value of milk." 

Yes, I remeimber the letter now. 

Interrogated as to whether the witness still hoped that they 
would continue to go through with this useless proceeding, which 
lie had testified was useless, the witness answered, ^' Yes, sir." 

At the meeting of l^ovember 29, 1909, there was nothing said 
in reference to placing a value upon milk. There was no action 



:N"o. 45.] 157 

taken or no talk about it. The time I raised the price of bottled 
milk from eight to nine cents a quart I did not know that Bor- 
dens had, or had intended, to raise the price of bottled milk to the 
same amount. I heard some talk about it. That did • not in- 
fluence me in mj decision at all. There was no relation whatso- 
ever in the raise of the price of milk by Borden and myself. 
I could not say that the raise of any one of those dealers had 
anything to do wdth determining me to raise the price of milk, 
although I think there were quite a good many raised within a 
few days of ^N^ovember 1, 1909. I arrived at the conclusion to 
raise the price about the middle or the 20th of October. I did 
not know at that time that Borden intended to raise the price. 
I attended a meeting at the city hall in reference to the milk 
question before the board of aldermen, or some committee of the 
board of aldermen. I heard part of the discussion. I do not 
remember whether I saw Mr. Gorman there or not. I have no 
knowledge or remembrance of telling Mr. Gorman as far as my 
subscription is concerned I would go in as I told him and he 
could have any one from his paper or any of the dealers telephone 
to nie and I would confirm what I had told him. I wouldn't 
swear that when Mr. Gorman asked me to sigii the paper for the 
educational campaign, I replied to him : ''I don't want to be 
so near the top. I don't want to appear as one of the leaders." 
N^o. one connected with Borden's in an official capacity or as 
director owns stock in the Orange County Milk Association. At 
nine cents a quart we calculate at the present time we are losing 
more than one-quarter of a cent on every quart we sell. 

William B. Conklin: 

Prices paid to the producers for milk at Price's Station, Nevj 

Jersey : 

1907, average for six months, three cents a quart. 

1908, average for six months, $1.35 per cwt. 

1909, average for six months, $1.85 per cwt. 
1909, average for other six months, $1.30 per cwt. 
1909 and 1910, average for six months, $1.96 per cwt. 



158 [SENAxa 

Prices paid to the producers for milk at Montgomery county^. 

N. Y.: 

1907, average for six months, $1.08 per cwit. 

1907 and 1908, average for six months, $1.49 per cwt. 

1908, average for six months, $1.20 per cwt. 

1908 and 1909, average for six months, $1.63 per cwt. 

1909, average for six months, $1.15 per cwt. 
1909, average for last three months, $1.83 per cwt. 

Prices paid to the producers for milk at Orange County, N. Y.r 

1907, average for six months, $1.34 per cwt. 

1907 and 1908, average for six months, $1.93 per cwt. 

1908, average for six months, $1.35 per cwt. 

1908 and 1909, average for six months, $1.83 per cwt. 

1909, average for six months, $1.30 per cwt. 

1909 and 1910, average for six months, $1.96 per cwt. 
(Blank form given to producers received in evidence and 

marked Exhibit-G.) 

All the producers that take from me at one place, I pay them 
the exchange prices for milk. That place is at Goshen. In the 
blank space I would fill in "'Mtarket Prices." That necessarily 
does not mean exchange prices. The farmers did not sign the 
form, they simply took them home and read them for the infor- 
mation. If I filled out on the second page of this paper called 
rules and regulations (Exhibit 4-G), the prices, and the farmer 
began to make deliveries and complied with all these rules, T 
would feel myself obliged to accept his milk during all the months 
opposite which I had set a price. As soon as the price is set on 
this form, I regard it as a contract. There is always a feeling 
in the country that they want to wait and see what Borden's 
prices lare. The above answer in reference to the question as to 
whether there are only two standards of prices, Bord'en's or ex- 
change, regarded as the market. I don't consult Borden's prices 
when making up my mind what the market is. We leave that 
with the farmer to decide. I take into account the different 
prices when arriving at the miarket price. MJarket prices, valua- 
tions as have been found by the exchange. I am paying four 



No. 45.] 159 

and one-fourth cents a quart at Goshen. That is the exchange 
price at the present time. I don't think there is a single instance, 
in this creamery that I have at Goshen, where I haven't paid for 
an}' single month the exchange price for milk to any single farmer. 
As to the question, ''Wouldn't it have been to your interest to 
have used your influence and your vote in the board of directors 
of the Consolidated Milk Exchange to reduce the price to be 
paid to the farmer at certain times," after many objections on 
the part of Mr. Ely, v^itness answered, " I have no answer to it." 
I buy milk from some farmers, based upon exchange prices. 

Thompson W. Decker: 

I am the treasurer of the Sheffield Earnis, iSlawson & Decker 
Company, and have been such since its incorporation, and have 
been a director since its incorporation and am now a director. 
I am one of the original owners of the Decker concern that went 
into this corporation. I have nothing particular to do with fixing 
the price of milk that is fixed for producers. In the latter part 
of September we talked about raising the price to the consumer 
from eight to nine cents. We thought that we ought to raise 
the price, but we hadn't decided on it. We talked the matter 
over — in October Mr. Horton went away and he said, '^ 'Now, 
gentlemen, we will postpone this until I come back, until we see 
the condition of things." When he came back he heard that 
Eorden had raised the price. " He decided to raise the price, our 
price." Borden's raise of price might have influenced us some- 
what. I never had a consultation with any dealer prior to 
November 1, 1909, in reference to the advisability of raising the 
price of household milk, only in a general way, when anybody 
came in that talked price; but no definite understanding with 
anybody. I do not know any ofiicers of the Mutual Milk and 
Cream Company, except Mr. Kavanaugh. I met him at the office 
of the Charity Commissioners. We both had a bid in there to 
supply the institutions. I know C. H. C. Beakes, Walter K. 
Comfort, T. O. Smith, Joseph Laemmle, Mr. Campbell, Mr. 
Conklin and Mr. Bleier, Mr. Slaughter and Mr. L. L. Campbell. 
I haven't seen any of these men during three or four months 
immediately preceding ^November 1, 1909, and have had no com- 
munications with them. 



160 [Senate 

Alfred Ely: 

I reside at 'New York city and divide my energies between 
farming and practicing law. I have never been in the milk 
business. I have ^ve shares of the Consolidated Milk Exchange. 
I have had these five shares since its incorporation. I prepared 
the incorporation papers for the company. I think I had one or 
two shares in the old Milk Exchange, Limited. I was counsel 
for the Milk Exchange in the action brought against it by the 
Attorney-General to dissolve it. Some of the stockholders of the 
old Milk Exchange, Limited, are also stockholders in the Con- 
solidated Milk Exchange. I know of no objects of the incorpora- 
tion of the Consolidated Milk Exchange except as they are stated 
in the articles of incorporation. I have attended annual meetings 
of the stockholders of the Consolidated Milk Exchange in one or 
two instances, but I don't recall when they were. They were a 
good many years ago. I attended a meeting of the board of di- 
rectors within about two or three weeks, but I refuse to state 
what took place at the meeting, as I was there in a professional 
capacity. I never heard of any agreement among the members 
of the stockholders of the Consolidated Milk Exchange to raise 
the price of bottle milk from eight to nine cents a quart on or 
about November 1, 19'0'9. I should like to state that in my 
opinion this whole proceeding is based on the misinformation 
or a mistaken imagination. In my opinion the increase in the 
price of milk during this present winter is fully justified by the 
conditions of supply and demand and the prices paid the farmer. 
As a farmer I am being paid and receive more for my milk 
than I have received before for many years, and as a farmer, 
my opinion is that the price paid to us is insufficient even now, 
having in view the conditions under which milk is produced 
by farmers and producers at the present time. The burdens 
upon the farmer and cost of producing milk has been steadily 
increasing for many years. In some sections of the country that 
I know of the farmers have in recent years diminished the 
amount of milk they produce because the price which they, re- 
ceived did not in their opinion sufficiently compensate them, and 
in order to keep up with the proper production under present 
conditions, every dairy farmer has had to increase his capital. 



Iso. 45.] 161 

rebuild his barns and produce milk under conditions compelling 
constantly increasing costs. Labor has increased, feed has in- 
creasedj tbe average values in cost of dairy cows has increased, 
the cost of buildings has increased, and maintenance and opera- 
tion in every respect; cost of handling the milk has increased, 
everything has increased. One of the chief items of, increase 
has been the cost of feed; and if the Attorney-General would 
look into the cost of feed to the farmer he would be doing the 
farmer a much greater service than in looking into the normal 
iind natural increase in the price of milk based upon the slight 
increase to the producer. From my knowledge of the milk busi- 
ness, it is impossible to have any such combination or agreement 
as you mistakenly think exists. There is the keenest kind of 
competition so far as I have knowledge or information extending 
over a great many years, between the milkmen of every grade 
and every kind, and a great many men have gone out of the 
business in the last ten years because they could not survive 
under the conditions which have existed. The competition has 
been so keen that they have died in great numbers, and the 
tendency has been in the milk business within fifteen years to 
constantly liminate the smaller man and constantly aggregating 
the business in the hands of these large companies like Borden's, 
Slaw^son-Decker, Mutual, McDermott, and others, all of whom 
have been increasing steadily in size and amount of business done 
and number of quarts handled during the last fifteen years, and 
to the 2:radual exclusion and elimination of the smaller men who 
were in the business fifteen or twenty years ago. The farmer 
has been driven out of the Xew York market entirely. I have 
got about 250 cows on my different places. They are located 
in the Warwick valle}^, part in l^ew York and part in I^ew 
Jersey. I deliver three dairies to Borden's, and two dairies to 
the Orange County Milk Association. It all comes in over the 
Erie road. My recollection is that I was counsel in the organiza- 
tion of the Consolidated Milk Exchange. As such counsel, I 
advised them at the outset. They have not consulted me and 
I do not recall having advised thei-a or served them now in a 
good many years. My recollection is that I advised the Con- 
solidated Milk Exchange that they must not attempt in any 
6 



162 [Senate 

way to name a price or to fix a price or to have any agreement 
or understanding with respect to prices. I remember you (the 
referee), and I had some talk on that at some time walking 
down from this reference, and I have been several times since 
then turning it over in my mind and my recollection doesn't 
return to me in reference to that. I did advise them that they 
must not attempt in any way whatever to make a price or fix 
a price or name a price or do anything that should work that 
way. You see, the Milk Exchange Limited, was a business 
corporation, organized as such, to buy and sell milk, and its- 
business was exclusively to sell milk for farmers upon a com- 
mission, and it by resolutions of the board fixed in advance the 
price which it would undertake to charge the dealer in the city 
for the milk which it sold as a commission merchant, and that 
was a novelty in the mil]^ trade. That thing had never been 
done before. Previous to that time the farmer had sent his milk 
down to ^ew York, and the value, the ultimate money payments,, 
was either collected by the farmer personally or was collected 
by species of commission merchants, who collected the amount 
which he received from the milkman in New York city, but what 
was to be the amount collected was rarely known in advance until 
generally sometimes ten or fifteen days afterwards, and there was 
some way or other a price was agreed upon in some way, as Mr. 
Campbell testified here with reference to that point. 'Now the 
Milk Exchange Limited — 

Q. You are now speaking of the old company ? A. I am 
speaking of the Milk Exchange Limited, which is a business cor- 
poration, pure and simple, nothing else; the Milk E'xchange Lim- 
ited undertook to do the business of a commission merchant and 
to state in advance that it would take dairies of milk for farmers 
and sell them on a commission of 3 per cent, and would announce 
to the farmers in advance the precise ^amount which it would 
agree to collect for, and in doing so, it had naturally to state the 
price at which it would sell, so that if it took a dairy of milk 
to sell, it was bound to collect the price it stated for the benefit 
of the farmer, less 3 per cent, commission, and unless the man 
in New York would pay the Exchange Limited that price, they 
couldn't sell it, or they would have to make up the deficiency t<> 



Xo. 45.] 163 

the farmer out of their own pocket. Of course if they sold for 
more, then the farmer got the benefit of it. Xow, the old Ex- 
change named that price ; that was 'the Milk Exchange price, and 
that was all the Milk Exchange price was ; it was the price which 
the ^lilk Exchange undertook — 

Q. Didn't they hold themselves out to the farmers as being 
a wholly disinteres'ted body of men that were endeavoring to 
arrive at a fair valuation of milk in Xew York city, when in 
reality they were commission merchants ? A. 'No. They didn't 
hold themselves out anything of that kind. There was no doubt 
about the proposition, whatever. 

Mr. Referee, I have some very valuable statistics which I will 
be glad to give. They are based on thirty years' experience in 
farming. In this investigation, my opinion is that the State has 
no concern with the cost of milk or the cost of handling it or 
the price. Under this investigation, the only thing, in my 
opinion, that has any weight is whether there was a combination 
or not, and the courts have already held that the profit and loss 
is not a question in this investigation. I think that is pretty. 
good authority. I never heard of the Consolidated Milk Ex- 
change doing any mercantile business. It is incorporated under 
the statutes of the State of New Jersey. In reference to the fact 
that the farmer or producer obtains on an average a price of 
three and one-third cents a quart for his milk, and the middle 
man gets nearly six cents, I would say as a farmer: The year 
begins on the first day of April in each year, and ends on the 
thirty-first day of March in the following year, and all milk 
prices and all farm contracts and all farm payments and expenses 
and all farm accounts are made mth reference to that farm 
year, from April to April, and not with reference to the calendar 
year. Kow, with reference to the farm year, it is divided into 
two halves, one half running from April first to October first, and 
the other half running from October first to April first, and 
almost all dairy statistics and dairy prices so far as milk is con- 
cerned are averaged and rated with reference to those two half 
years and never together. They are rated separately and the 
only bringing of those together and making a year's average is. 
for comparative purposes and not with reference to the facts 



164 [Senate 

except as they may be comparative. The costs of producing 
m.ilk are totally different when considered during the six sum- 
mer months, which ^are April, ^^^J, Jnne, July, August and 
September, and the six winter mionths, so called, October, Novem- 
ber, December, January, February and March. During the isum- 
mer months the cattle are lat pasture mostly. AYe turn them out 
in our section of the country any time from the 15th of April on, 
dependent on the season and on the weather. We begin to stall 
and stall feed from the middle of October on, according to the 
weather. The co'sts of producing during the winter months are 
very different from the cost of producing during the summer 
months, and the prices that we receive during the winter months 
are different from the prices we receive during the summer 
months. The large milk companies like Borden'iS announce their 
prices always for six months and no more. On the fifteenth day 
of March they announce the prices they will pay for the ensuing- 
summer months and are called their summer prices, and averaged 
up accordingly by those who keep accounts, the farmers who keep 
accO'Unts. On the 15tli of September the Borden's and others 
similarly working announce their prices for the ensuing six 
months, and they are called the winter prices. There is a wide 
difference between those two prices which disappearsi when you 
average. ■Now, Borden's are paying me for three of my dairies 
now for this current six months beginning with October 1, 1908, 
and ending March 31, or April 1, 1910, an average per hundred 
pounds of 1.9i66 or an average of 4.179 cents per quart, that is 
almost 1.18 eents or .0418 cents. Now I am getting 4.18 cents 
averaged from Borden's for every quart of milk I deliver to them 
from the first day of October current to the first day of next April 
current, that is what I am getting. 

Q. How about the last summer months? A. Take the last 
summer months from April 1, 1909, to September 30 or October 
1, 1909, I received from Borden's an average for every pound 
of milk I delivered to them of 1.30 per hundred which averaged 
into quarts, if my computation is correct, and I think it is, 
.02797; that is, almost, we will say 2.8, very close to 2.8 cents; 
so that within the last twelve months, during the six summer 
months, I received practically, within a fraction of a thousandth 



'No. -15.] 165 

of a cent. 2.8 cents for the six summer months and I am now 
receiving 4.18 cents for the six winter months; so vou will see 
if I averaged those together it brings the thing down, but neither 
one of those averages is the correct reflection for the winter months 
or the correct reflection for the summer months ; so that in order 
to be correct you must keep those averages separate. Borden 
pays me 4.18 cents for every quart of milk I bring them, moro 
or less, and they take every quart I deliver. It is weighed up 
by the pound, no matter how it varies, and it varies of course 
from day to day; those are the prices which I am receiving for 
three of my dairies, and have received. I deliver at ^ew Mil- 
ford, Orange county, at Borden's station. My men drive in there, 
two of them, two of my dairies go into Borden's receiving station 
at Xew Milford, Orange county, Xew York, and my two farmers 
are there with milk before 8 :30 o'clock, wdth the milk of the 
morning's milking and the night's before milking, and they weigh 
up and I get credit for every pound I deliver. I suppose the 
fractions of a pound are against me ; I don't know, ^ow, then, 
on the fifteenth of the following month, I get a check from Mr. 
Borden for the total number of pounds and the price per hundred 
attached to the check. On the second or third dav I 2;et the 
report from the farm giving me the price-number of pounds he 
deli^'ered, and I check one against the other, and I don't know 
whether I am rieht or not. The third of mv dairies 2:oes to 
Borden's at Huntsville, Xew Jersey, where the result is the same; 
and so far as I knoAv anything about it, Borden's pay exactly the 
same price in all of their receiving stations for all milk that they 
receive. Xow, in addition — this is an important proposition — 
all the milk of the present day within the ]^ew York radius is 
produced under conditions imposed by the Xew York Health De- 
partment. My stables are inspected constantly; my cattle are 
inspected constantly ; and the care and cleanliness and every other 
element, the condition of the cattle which goes into the produc- 
tion of healthy milk, is looked after very closely, indeed, b\' Bor- 
den's and by the health department, by the local health people, 
and if they sometimes only had inspectors who knew something 
about dairying, the result would be even better than it is. But 
for myself, personally, I welcome this thing, because it is of the 



■ 166 [Senate 

greatest importance to me to have things in good order; it is of 
more importance to me to have things in good order than it is to 
produce a few pounds more or less of milk, and I find that the 
inspections of the health department of New York and of the Bor- 
dens are of great assistance in increasing the general quality of 
the milk. Of course that costs more. I have had to rebuild most 
of my barns in the last fifteen years. I suppose I have got on 
my place one of the finest dairy barns in existence. I have known 
places on the East side and among the poorer sections where you 
could buy good milk in 'New York city for four cents a quart, 
or if they got three quarts, they might get it for ten cents. I 
am not speaking of the men on Fourth, Fifth and Sixth avenues 
and the blocks between that. They have always paid a higher 
price than others, because the cost of delivery is much greater ; 
but the vast amount of milk in this city is deli\ered in cans to 
stores and dipped out of the stores to the people who come there 
and, in my opinion, that is more than 60 per centum of the milk 
that comes into New York citv. In 1877 there was a statute 
passed in this State authorizing the incorporation of boards of 
trade and exchanges; that statute provides as follows; passed May 
3, 1877 : ^'At any time hereafter, any twelve or more persons who 
may desire to form a oorporation commonly called board of trade 
or exchange, for the purpose of fostering trade and commerce to 
protect it from unjust or unlawful exactions, to reform adduces 
in the trade, to diffuse accurate and reliable information among 
its members as to the standing of merchants, and other matters, 
to produce uniformity and certainty in the customs and usages 
of the trade, to settle differences between its members, and to 
promote more friendly intercourse between merchants, may make, 
sign, acknowledge, and so forth." At the time it was contemplated 
organizing this Milk Exchange Limited that statute was supposed 
be me to be still in force, and a certificate of incorporation was 
prepared by me for the incorporation in the State of New York of 
a milk exchanere substantiallv on the identical lines 'of the certi- 
ficate of incorporation substantially as fileid in New Jersey. This 
certificate of incorporation containing this very provision which 
you have referred to several times and which is also in the statute, 
^' To produce uniformity and certainty in the customs and usages 



Xo. 45.] 167 

of the trade " was sent to Albany to tlie Secretary of State, and 
then returned to me with the notation that this statute of 1877 
Jiad been repealed that July by a statute passed the previous ses- 
sion. I was also informed that there was another corporation 
of so similar a name in the State of Xew York, called the Xew 
York Milk Exchange, that it for that purpose seemed inadvisable 
to incorporate the Exchange in the State of Xew York. But it 
was a perfectly legal, statutory provision to organize a corpora- 
tion for the i^urpose of 2>romoting uniformity and certainty in 
the customs and usages of trade. That same year the Member- 
ship Corporation Law was passed, and the Membership Corpo- 
ration Law embodied in it word for word these very provisions 
(Laws of 1895, chapter 559). Subsequently this identical stat- 
ute, Laws of 189'5, chapter 559, which was in this respect a re- 
enactment of the clause of 1877, became a part of the Consoli- 
dated Laws of this State, and at the present time a board of trade 
or exchange or corporation may be formed in this State for the 
pjrecise purpose of promoting unifoi'mity in the customs and 
usages of trade, so that the provision of the certificate of incorpo- 
ration that '' one of the objects of the corporation was to produce 
uniformity and certainty in the customs and usages of the trade " 
is absolutely lawful both in this State and in any other state that 
I know anything about, so that the provision which is inserted in 
there Avas inseirted as a transcript of the provision them author- 
ized and now authorized by statute of the State of ^lew York; 
so that the provision with reference to the certainty and uni- 
formity in the customs and usages of the trade was a legal pro- 
vision, was copied from the statute of ^ew York then in force 
and at j>resent in force. That refreshes my recollection with 
reference to that point, and I found the original certificate which 
I had drawn at that time and the letters of the Secretary of State. 
Xow, with reference to some of the questions that you have asked 
me, as to the cost of producing milk, I would like to give these 
statistics now because they are in such form that they would be 
interesting in comparison, I think. Subsequently, I might like 
to supplement these, if it seems desirable. I have taken the last 
six years' returns from my farms, with respect to which I have 
kept accurate statistics, and I have averaged those last six years' 



168 [Senate 

returns in a variety of ways. I have taken four farms for the six 
years and averaged them. I have then taken two separate farms 
and averaged them together for six years, the conditions of those 
farms being almost identical in so far as it is> possible to have two 
farms operating under the same conditions. I have taken one 
other farm where the conditions are better than the two preceding 
farms and averaged those up for six years, and I have averaged 
this last farm back for eleven years. I find the price of milk 
which I have recei^'ed for those six years, averaged up, is as fol- 
lows, this being the actual price per quart actually received by me 
in cash, the groissi receipts being divided by the gross nnmbei- of 
quarts, so that this result is without any connection whatever 
with any posted price or contract price, the differences resulting 
from the fact that more money might be made under one price, 
or more money might be made in the winter months than the 
summeir months, or vice versa: For four farms averaged for 
six years, beginning April 1, 1909, I received .02*99 cents per 
quart ; that is one-hundredth of a cent less than three cents. My 
feed during those six years averaged up for the four farms was 
49 per cent, of the price received, and met net proceedings per 
cow milking avera2*ed for the six A'ears on the four farms was 
$50.0'3, after deducting the feed bills. N^ow, during this period 
and under the same average, it took 1.15 pounds of feed to make 
one quart of milk, at an average cost per quart of $.0(141. That 
is one and fourteenth cents. IS^ow^, take the two other farms 
where the conditions are identical as far as it is possible for them 
to be; they lie right together in part of the S'ame tract; for the 
six years I received $.0'296 per quart. The cost of the feed was 
approxim^ately .368 per cent of the price. The net profit per 
cow milking after deducting the feed bills, but making no other 
dedlictions, was $54.37 per cow milking. ISTow take one other 
farm, a farm by itself, not included, for the same six-year period, 
averaged, my actual price received was $.0299 per' quart. The 
feed was 43 per cent, of the price. And the net receipts per cow 
milking, after deducting the feed bills, was $64.9'8. ISTow take 
the same farm for eleven years, beginning with April 1, 1898, 
and ending April 1, 1909, my price received was $.02'72 per 
quart. My average feed was .418 per cent, of the price received 



]S^o. 45.] 169 

(I am si>eaking oiilv of my own prices received), and the net 
receipts per cow milking, after deducting the feed bills for eleA^en 
vears, was $5'9.73 per cow milking. It took during those eleven 
vears 1.7 pounds of feed, averaged through the year, to make a 
quart of milk, at an average price for the eleven years of $.0illl4. 

The Referee. — You mean grain or feed ? A. I mean all feed 
that is fed, weighed by the pound and averaged for the year. I 
know what I am feeding; I keep track. That is all the feed 
that is fed. !N^ow, the average feed fed duriug the six years, 
averaged up for all these farms, and undei^ varying conditions, 
Avas .121 per cent, of the price received; slightly over 42 per cent. 
so that it is a very close apjiroximation, and in my opinion, that 
is an almost absolutely accurate approximation of the cost of feed 
in ])roduccing one quart of milk ; forty-tw^o per cent, of the price 
received is expended in feed. In other words, the price of milk 
as averaged being $.0299 per quart, the cost of feed per quart is 
$.012588; so there is one cent and about twenty-six one-hun- 
dredth*. Xow. the cost of labor, maintenance of machinery and 
teams and other items of that kind, on the same basis, is $.008656 
per quart for this period; that leaves a balance of slightly over 
eighth-tenths of a cent per quart to the farmer and is all that is 
left to pay the folloAving items: Taxes, which wdll average about 
$4 per cow ; insurance, all repairs to buildings and plant, all the 
hiterest on plant and the investment, and any profit there may be. 
^TsTow, in my opinion there are very few farmers who have any 
such accurate statistics running over a period of years out of which 
it is ]:)Ossible to make any computation of cost, and in my judg- 
ment those figures are substantially accurate results. 

The referee. — T3o you figure in there any allowance for ad- 
ministration ? A. *Xone, whatever; that is, none whatever for 
myself, nor supervising. 

Xow, I would like to add to this: Since 1898 the average 
price of milk to the farmer has been steadily increasing, and tak- 
ing one of my farms for all those eleven years, the following are 
the ju'ices which I have actually received for my milk for the 
year, based on a division of the gross receipts from the milk di- 
vided by the actual number of quai-ts sold; these are all farm year 
calculations; bear in mind that the fannei* knows nothing about 



170 [Senatk 

the calendar year, and any attempt to figure upon the calendar 
year will result in errors : In the year, 

1898-9, April 1st to April Ist, .0'21 cents per quart. 
1899-1900, April 1st to April 1st, .0231 cents per quart. 
1900-1, April 1st to April 1st, .0247 cents per quart, 
1901-^2, April 1st to April 1st, .0237 cents per quart. 
1902-3, April 1st to April 1st .0268 cents per quart. 
1903-4, April 1st to April 1st .0257 cents per quart. 
The average of those six years is .0'242 cents per quart. 
190'4-e5, April 1st, to April 1st, .0257 cents per quart. 
1905-6, April 1st to April 1st, .0293 cents per week. 
1906-7, April 1st to April 1st, .0302 cents per quart. 
1907-8, April 1st to April 1st, .0346 cents per quart. 
1908-9, April 1st to April 1st, .03-39' cents pe^r quart. 

That you see is three and four-tenths almost. Those were the 
actual prices which I received during those years at this particular 
farm, which is fairly standard. 'Now, during that same period 
there have been great fluctuations in the amount of feed required 
to produce a quart of milk, and there have been some fluctuations 
in the value of the feed in comparison with the price, but the cost 
of feed in 1908 and 1909 was the highest we have ever known it to 
be and was flfty per cent, of the gross receipts of the price received, 
so that upon a price received of 3.4 cents, 1.7 cents went to feed. 
We had to pay that year as high as thirty-one and thirty-two dol- 
lars per toil for feed; ^nd it took just as many pounds of feed 
to make a quart of milk that year as it did any other year. ISTow 
during that last year my balance per cow milking, after deducting 
my feed bills, was $63.95 per cow, Avhile the preceding year, 
1907—8, the feed bills were only about thirty-six per cent, of" the 
price and my balance per cow was $100.86 per cow milking. ]N"ow, 
as a general result of these figures, and my own experience for 
thirty years in farming, my observation of my friends and neigh- 
bors who are around me in all directions, I want to say that in 
my opinion there is no approximate cost for the produetion of 
milk per quart, but that the cost will vary according to each farm 
and according to each farmer and the conditions under which he 
is operating, and also according to the quantities of milk which 



No. 45.] 171 

lie makes each, month during the year, in my opinion the one most 
important fact with reference to the cost of milk and the profit 
to the farmer is quality of the cow, with the single exception of 
the number of pounds of feed which it takes to make a quart of 
milk. A ten-quart cow or eleven-quart cow costs no more than an 
eight-qnart cow. 

The Eeferee. — Costs no more to feed ? A. Costs no more to 
produce the milk from one cow than from another; it costs no 
more to produce an average of eleven quarts than eight quarts per 
day except the cost of the feed. The difference between two of 
my farms which I have given you are explained in this way — 
some of the differences : The average cost per cow milking per 
day for four farms, average for six years, was 8.98 quarts per 
day per cow milking. ]^ow, two of those farms, hawever, pro- 
duced an average of 8.28 quarts per cow per day only. During 
the same period one of those farms produced 10.63 quarts per day 
per cow milking, and this same last farm for an average of eleven 
years produced 10.39 quarts per day per cow milking during the 
entire eleven years. That difference of two-and-a-half quarts per 
day makes a difference between a profit and no profit. I would 
like to say another thing. One of the greatest elements of expense 
— the two great elements of expense to the farmers in producing 
milk are, first, the cost of feed, which has more than doubled ; I 
have bought the same feed at twelve or thirteen dollars per ton 
that I am now paying twenty-nine or thirty dollars ; and second, 
the item of labor, which has more than doubled in the last fifteen 
or twenty years, on my judgment owing very largely to the opera- 
tions in this country of the protective tariff laws which have at- 
tracted all the labor possible into the manufacturing villages where 
the profits of business permit the payment of higher wages than 
it is possible for the farmer upon these close margins to compete 
witb. 

The Referee. — How do you account for the fact that if labor 
has doubled, and with double the price, that the farmer is making 
now more than he did twenty years ago? A. The reason is this: 
We are farming far more intensely. Take one of my places I 
have in mind, I am carrying on an average of seventy-five or 
eighty and when I began I had great difficulty in carrying twenty 



172 [Senate 

or tweiitj-fi\'€, and my gross receipts are double from the same 
farms what they were thirty years ago, twenty-five years ago. 

The Referee. — Accounted for by more intelligent handling of 
the soil ? A. Intense farming:. I am makins: milk twelve months 
of the year, and in the old days we made it eight months. Then 
Bordens have had a tendency to increase the price of labor very 
much. When they come in they pay high wages and they attract 
all the available labor. 

I want to add this: The figures which were testified to here 
on the last session by Mr. Scudder with reference to the Bordens 
and with 'reference to the Slawson-Decker Company are absolutely 
valueless and absolutely misleading, because they are absolutely 
incomplete for the reason that the fundamental factor necessary 
to give those figures the slightest value is lacking, and that is, the 
number of quarts to be applied to those figures, ^ow, if Bordens 
are delivering three million quarts per day, then those figures are 
a very small figure per quart. If they are delivering four million 
quarts per day, they are very much less. If they are delivering 
two million quarts per day, they are very much higher. Those 
fi'gures are valueless except the actual number of quarts of milk 
purchased by the Bordens and applied to those totals are also 
added and the percentage taken. ISTow, there is this thing to be 
remembered, that for every forty quarts of milk delivered and 
paid for by creamery men or milkmen or a dealer, he never finds 
over thirty-eight quarts. Every time you pour milk from one 
vessel to another, there is a certain amount left on the skin of the 
can or the bottle or on the surface. When you repeat those pro- 
cesses you never will find two-fortieths or one-twentieth of 5 per 
cent. Five per cent, of the whole business is never to be found, 
so that you have got to get back to the quarts bought in order to 
have any correct deductions from these statistics. 

J osEPi-i A. Ferris : 

I reside in Montclair, ]^. J. I have been in the wholesale 
milk and cream business since 1866. My present place of busi- 
ness is 293 Greenwich street, 'New York, under the corporate 
name of '' Ferris Milk & Cream Company." I began business in 
Brooklyn by buying out Brown & Bailey ; sold out to my brother ; 
bought milk and cream from Bro^^m & Bailev; went into the con- 



Xo. 45.] 173 

densed milk business with S. W. Canfield and then went with 
the Pullman Car Company; then returned to Brooklyn and en- 
tered business again with Mr. Canfield. Borden's superheated 
milk patents ran out and I arranged with Mr. Canfield to buy 
milk of him for thirty cents a quart. Bordens were then selling 
the same class of milk at forty-eight cents a quart and w^e began 
competition with Bordens. Formerly, we had sold '^ thin milk " 
and people thought that '' other milk " being thicker and heavier, 
was better than the thin milk, and the Buckley boys left Bordens 
and joined us and we were then first in the field of the super- 
heated milk business. I have known Mr. Rogers, president of 
Bordens, since 1871, at which time we were both drivers. I saw 
Mr. Rogers four or five weeks ago at my office in Greenwich street. 
After some conversation with Mr. Rogers, he said, ^^ Joe, you 
know that there is no trust in this business." '^ Well," I said, 
'' Mr. Rogers, I don't know whether you call it a trust or not but 
1 have only to take Avhat I hear from people who seem to have 
the knowledge of what thev are talkino' about, that there is some- 
think in it." 

All the people in the milk business seem to be down upon me 
except Mr. Beakes, and now from what I am told, I guess he is 
too. Mr. Rogers did not say why he called to see me. It was 
natural that Mr. Rogers should stop and see me, having known 
each other for so many years. Mr. Rogers only happened to stop 
and see me as he was passing along the street. I did not expect 
him to call and see me. '' He is on the top shelf and I am away 
down at the bottom." I cannot say that I told him that I had heard 
that he and Mr. Beakes and Mr. Horton met over in Jersey City. 
He said he was glad I was not in the retail business. I have never 
been a member of the Consolidated Milk Exchange. They won't 
have me in it. ISTor am I a member of the Retail Dealers' Pro- 
tective Association. I have had no dealings with the association. 
3 have had dealings with the Orange County Milk Association — 
bitter competition. I would be willing to sell milk for eight 
cents, but I am in the wholesale business. I might strike two 
months that its costs pretty near that. The other seven are in the 
dealer's favor, but my experience is limited in the retail busi- 
ness. The man that only sells a few bottles per wagon cannot 



l'^^ [Senate 

make as mucli as a man selling 300 or 400 quarts. Mr. Webb 
Harrison suggested our going into the milk business on a half and 
half basis, he to furnish the money and the milk. He then 
abandoned me, and the only explanation he made to me was, 
" 'Some day I will tell you why I didn't go in with you.'' Mr. 
Harrison introdaiced me to a Mr. Fayen, formerly of the Mutual, 
and finally he abandoned going in with me,. I had several deal- 
ings with others, and by various devices, these parties and others 
were discouraged going into the business in New York. Mr. 
Durland, with whom I had a contract to take milk, after a short 
time telephoned me, " I am awfully sorry Ferris, but I can't 
send you any milk to-night or any cream." He said he would 
arrange with another man to ship me milk. This party was to 
ship me milk, but didn't send it and Mr. Durland said, '' I tell 
you, Ferris, they had a man out here on Sunday and they said 
if they shipped any more milk to you that they would put me out 
of the business in Newark as well as New York." I had other 
troubles, such as having milk shipped two weeks after I "had 
ordered it and also trouble with the freight station. Some diffi- 
culty about handling it, as I had no ice and no office. In August, 
1909, I had a meeting at the Grilsey House with several men, one 
from the country, with a view of purchasing milk from him. We 
talked over the conditions here in New York and we agreed that 
we woidd be up against the combination and would have a hard 
time. The man from the country was Mr. Fayen, the same man 
I had arrangements with before, and everything fell through. He 
had been formerly president of the Mutual and he said, '^ Whom 
do you mean by the combination ? " I said. " The Milk Ex- 
change." I said, ^' Do you say to me in the presence of these 
men that they have agreed amongst themselves and that each 
other shan't interfere with each other, and if a new man comes 
in the business, do you say that they will put him out of the 
business ? " " Well, now, he says, " They had a smart lawyer 
down there in Nassau street that dtowed up these things and 
they knoAV pretty well what they are doing." I said, 
" What are you trying to do ? Are you trying to get these people 
in jail? " He says, " No." But he said, '' There it is." Well, 
Mr. Fayen went back to Vermont and I never heard of him 
since. Then I tried to enter business with Mr. Jones. 



1^0. 45.] 175 

Q. Well J now, Mr. Ferris, will you tell if any of the attempts 
to take trade away from you on tlie part of any organization after 
you went into it with Mr. Jones ? A. I had great difficulties with 
the McDermott peojple at the Mills hotel. Mr. Ogden Mills tried 
to help me but McDermott put the price down to 5 cents. I was 
selling at 5V2 cents and I met McDermott's price, and that was 
3 cents a can less than it was costing us. Then McDermott put 
the price to 4% cents. I could sell milk at cost but not below it. 
^^ Well, that ended me with McDermott." 

Q. Can vou ^ixe anv evidence where a number of dealers have 

^ I/O o 

organized in any way to compete with you unfairly ? A. Well, I 
know there are three or four of these same identical people, the 
Mutual, the Beakes Dairy Co., and the McDermott people, and 
the Stevens people, have not only met my prices, but went lower. 
An individual dealer is justified in putting his prices lower to 
meet my prices to get the business, if he can. 

Thomas A. Gorman: 

I met Mr. Laemmle, secretary of the Consolidated Milk Ex- 
change, in the spring of 1909, at the city hall, in the aldermanic 
chamber, where an ordinance had been introduced to compel milk 
dealers of Greater ]^ew York to pasteurize the milk that came 
into the city. I introduced myself to him. I called on him at 
his office a i&w days later in Bleeker street. While there, we 
talked over the milk situation and Mr. Laemmle said that the price 
ought to be raised, — • that they could not get along at the present 
price. We talked over the matter of raising some money for a 
<?ampaign of education of the public with a view of securing 
higher j^rices. He said he was Secretary and Treasurer of the 
Consolidated Milk Exchange. I met Mr. Beakes about ten days 
later at l^o. 6 Harrison street. At the time appointed, to meet 
•some members ; I was there. I met Mr. Beakes, Mr. Comfort, 
Mr. Conklin, Mr. Seller and Mr. Hunterman. 

Q. What did they say ? A. It was simply in the general dis- 
cussion that these series of articles was to be on milk, and it was 
to be an educational feature and lead up from the uses of milk to 
the dietetic features and not to incur it in any particular form, 
cooking of milk, or pasteurizing it, but simply curing milk and 



176 [Sexatk 

ultimately to take and get a price that would be better than what 
they were getting, and increase^ the price of milk. They never 
used the Exchange in any way, shape or form. They neA-er said 
'" the Consolidated Milk Exchange.'' Probably ten days after- 
wards, I met the directors again. Practically all were there, I 
guess. Mr. Howell and Mr. Slaughter were there. The discus- 
sion at this meeting was along the same line as before. The 
money that was thought necessary to start it was about $5,000,, 
and then increase it as they saw fit. I^ames of principal dealers, 
were written out as in Exhibit 2. Mr. Beakes wrote it out, and 
said it represented 98 per cent, of the Xew York milk industry. 
Mr. Laemmle 2:ave me a list of some of the laro;er dealers; there 
were on that list also; including the Sheffield Earms. ^o, not 
including the Sheffield Earms but Bordens, Mutual Milk and 
Cream, Alexander Campbell and Empire State Dairy. (This 
list was marked Exhibit 3.) Mr. Beakes made the letters op- 
posite the name of dealers, except Sheffield Farms. I called on 
^h\ Taylor of the Bordens Condensed Milk Co. and laid the 
proposition before him. He smiled and looked favorably on it 
and I told him his amount was about $500.00. I was to go back 
to see him ao-ain. He was to' talk with others and ^' he thous'ht 
this campaign of education would result in the public being edu- 
cated up to a higher price of milk." I talked with Mr. Loton 
Horton of the Sheffield-Earms-Slawson-Decker Co. and stated to 
him what I had stated to others and he said he would see Mr. 
Beakes about it. I knew it was not a matter to be made public,, 
although very little was said about it. I saw Mr. Conklin of the 
Orange County Milk Association and stated the proposition to- 
him. He said he would consider it. I told him his share was 
$100.0'0. I called on the 'Standard Dairy Co. Mr. Huterman 
represented it. I went up to the office of the company and was 
introduced to the treasurer, and the treasurer signed the name,. 
^^ Standard Dairy Company." I told him their assesement was 
$100.00 and he agreed to pay it. I saw the Seller Brothers at 
the board-room of the Consolidated Exchange. Mr. Seller seemed 
to think AveU of educating the public to a higher price of milk. 
He seemed satisfied, as did all of the six first persons. " It was 
a unanimous proposition so far as the six were concerned." 



Xo. 45.] 177 

Q. Wc41^ was the value of milk as a food^ or the advanciDg of 
the price the more important subject of the coufeTence? A. The 
object was to exj^loit the dietetic features, as well as the otJier 
features of the milk and then show how good it was and every- 
thing like that, and then the public would be in a. receptive shape 
to take and pay more for it. That was the object to take and 
have them in such shape that they were ready to take and feel 
pleasant and pay for it and more. 

^ir. Laemiiile of the Laemmle Dairy Company agTeed to it. 1 
asked ]\lr. Beakes, he being the principal one, to start the list so 
that I coukl go straight ahead. I saw Mr. Cavanaugh of the 
Mutual ]\lilk and Cream Comj)any several times. He seemed 
to think well of it. I stated tO' him the purposes, the same as to 
others. He said he would take it up with the directors. The 
people generally said " They would see Mr. Beakes." " Mr. 
Beakes naturally had sta'rted the thing and Mil*. Beakesi was 
kno^Qi among the milk tradie as being one of the brightest men in 
it, and one of the best men in it, and one of the solidest men in it^ 
and a man who had done things in the milk trade and for the 
milk trade." Some of the milkmen spoke unfavorably of the 
plan, such as Mr. Campbell. I called once, but did not come 
back, at the Leadman Dairy Company. I saw Mr. Sam Levy 
and he said he would see Mr. Beakes. All the dealers' that I had 
seen exjDressed themselves favorable to it. I saw Mr. Law" of the 
Briarcliff Farms. After putting the matter before him, he 
thought it would be a good plan but did not commit himself one 
Avav or the other. He invited me to come aoain. Mr. Rvan of 
the ^IcDermott Dairy Company did not commit himself. I saw 
th(^ Sanford Dairy Company. I do not recall with whom I 
talked. They were favorable. I saw the T. V. Smith & Sons 
and one of the Smith Brothers. They thought well of it and in- 
vited me to come back. Well, I said, '' It ought to bC' done." I 
saw J. A. Howell & Company and talked with Mr. J. A. HowelL 
'^ He was very favorably impressed with it and said he would go 
in it." I saw some of the other parties mentionied on the list 
and some of them I did not see. The period that I worked on 
this pro])osition was o\'er two months. In the latter part of the 
winter of 1009. I saw ^Ir. Comfort of the Reid Ice Cream Com- 



^78 [Senate 

paiiy. He was in favor of it^ but he wa& in favor of getting more 
than one newspaper into it. He: thought it would be better to 
Jiave more than one paper publish it. I saw Alexander Campbell 
in reference: to it: at his office in Brooklyn. He said he didn't 
want any advertising or anything done if his name was not on it. 
If he was paying for anything, he wanted to havei his name on or 
in it. I saw both Rushmores and they told me to come back. I saw 
.several other small dealers and they were favorable. I got the 
ballot book of the Consolidated Milk Exchange from Mr. Howell 
of J. A. Howell & Company of Jersey City. He said if I would 
use that I would get to the bulk of the milk dealers. It was a 
;good reference. 

(Ballot received in evidence and marked Exhibit 4.) 

Q. Is this movement still on? A. E^ot. so far as I am con- 
cerned, no sir. 

Q. Why was it you gave up going around and seeing these 
people? A. Why, I have seen enough to show the newspaper, 
that the movement was a go. That there was enough evidence 
to show that it would go, that is, more than one-half of the amount 
'was pro'mised and the chance for the paper to take and 'phone or 
write cei'tain concerns there and they would see just what they 
liad told me, but they didn't care about being on top of that list. 
I prepared no article on the value of milk as a food. 

Q. 'Then it was not because of any particular knowledge that 
you have of chemistry or of the medical properties of milk that 
you were brought into the thing? A. 'No, only the coinage. It 
was simply — 

Q. Will you go on with your answer and tell why it was that 
you gave it up ? A. Why, I made theise two calls: to start this sub- 
scription going and I saw Mr. Beakes and I saw thc' Standard 
Dairy, and they both signed and I went back to the office and I 
reported to the newspaper, and I had arranged on a. certain com- 
mission basis, the same as a free lance, to take that or any other 
thing and go ahead with it, and I wanted to get my commission, 
but they said there was nothing doing until $5,000 had been put 
up in cash, real money. So I could not, after a couple of months 
work, and things like that — I couldn't see it that way, but even 
at that I followed it up and saw some of the concerns afterward 



:N'o. 45.] 179 

-and tried to prove that they were there ready to put up their 
money i^nd the thing could be started. 

Q. You dropped it because your commission was not paid? 
A. Yeis, sir, that is the sum and substance of it. 

H. Oscar Hale : 

I reside at J^orwich in the county of Chenango, about 200 
miles from 'New York. I have had twenty-five years experience 
in producing milk and produced the same up to about twelve 
jears ago. I am now in the feed business. I have a knowledge 
of the conditions governing the production of milk at the present 
time from association with the farmers in my county. I have 
a . statement here from one who is considered one of the best 
farmers in this section. He produces certified milk and his 
milk goes tO' Isaac W. Kushmore Company in Brooklyn. This 
farm is situated on the Chenango river about three miles from 
the village of j^o^rwdch. They keep on an average about forty- 
five cows. The average cost of producing a quart of milk in 
1909 was just about three cents a quart, also taking into con- 
sideration the expense of keeping the dairy in condition, which 
I see he left out of his statement. I think the average cost 
of production would be about three and one-third cents. 'From 
his figures I see that he made a profit of about thirty-five one- 
hundredths of a cent per quart. Chenango county is a Borden 
county. The price of milk for the county is really made on the 
Borden price. They make their prices beginning with March per 
hundred pounds. They are March, $1.40; April, $1.40, May, 
$1.15 ; June, $.95 ; July, $1 ; August, $1.25 ; September, $1.40 ; Oc- 
tober, $1.80; l^ovember, $1.90; December, $1.95, January, $1.95, 
and February, $1.90. I think that the prodnoers should have an 
average of four cents a quart for the year in order to make a fair 
profit on the investment. I think if they obtained five cents 
in winter and three cents in summer, they could make a fair 
profit. About eighteen years ago two cents was paid for six 
months and three cents for the other six months and the farmers 
made money, but in those days feed was costing about one-third 
of what it does to-day. Most of the milk in my county is deliv- 
ered to Bordens and the price is made on their price. In the 
months of June and July Rushmore gave twenty cents a hundred 



180 [Sexatk 

less than the Bordens^ and for E'ovember and December he 
paid twenty cents a hundred more than Bordens, but they aver- 
age about the same as Bordens. Rushmore had a short form of 
written contract which the producer signed. Before Bordens 
came to my county there was only one month in six that they 
paid as high as two cents a quart, that was about nine years 
agOj and they never paid over two cents at that time. They have 
fixed an arbitrarily low price in that community every year 
when they were able to control. I do not believe that the price 
of milk could be put up as it is at present and held there with 
no one cuttino; it unless there wasi a combination. I have an 
idea that Bordens really make the price of milk and the Con- 
solidated Milk Exchange follows them. I presume the Con- 
solidated Milk Exchange price controlled my county before the 
Bo'rd'ens came there, except the section that BushmoTe had. I have 
supposed that there was an agreement among the Consolidated 
Milk Exchange members that they would not pay more to the 
farmer than the price that was fixed by the board of directors of 
the Exchange. That was the general understanding among the 
farniiers in my section. I have no personal knowledge that would 
lead rne to believe there was a combination among the dealers of 
I^ew York to raise the price of milk from eight to' nine cents 
a quart on bottled milk on or about i^ovember 1, 1909, except 
from the fact that they all raised it at the same time, the same 
amount on the same day. As to the situation under which the 
producer is paid three and one-third cents on an average through- 
out the year for a quart of milk, and the middle man is paid 
five and two-thirds for delivering that milk to the consumer, I 
think that comes from the fact that the middle man makes the 
prices both ways. He makes the price to the producer and also 
to the consumer, the consumer and producer having nothing to 
say about the price. I do not know of any other way in which 
the middle men could control the price except by getting together. 
I consider five and two-thirds cents a quart that the middle 
mian obtains as exorbitant when compared with three and one- 
third cents a quart to the producer, that is, with the amount of 
work that each does and the amount invested. I think by 
running milk through a separator you make it cleaner than by 



Iso. 45.] 181 

running it through cotton cloth. The separator will take out 
more dirt than is possible in any other way. I had one year's 
experience with selling milk before Rushmore came to Norwich, 
.and they did not have any separator but they set their night's 
milk and skimmed it, and the morning's cans w^ere filled up two- 
thirds full and the skimmed milk put in. I have seen them do 
that. Farmers in the west to-day are getting four times more 
for their corn and wheat than they did a few years ago, which 
may make the cost of producing milk more than it was at that 
time. There used to be co-operative creameries in my section 
but the large dealers have driven them out, although they are 
beginning now to build co-operative creamieries again. The Bor- 
dens have bought up a good many in our county. When they buy 
them up that shuts off all competition. I think that the farmers 
in my county that are selling to Bordens at their prices are about 
selling at cost. I think the price for the winter months is nearer 
right than the price for the summer months. I think a man that 
has a good dairy of winter cows can make more money during 
the winter months at the price they are paying to-day than he 
can for the summer months. I got a man that had a dairy of 
eight fresh cows for the last month. His check was $177, as 
he got the extra twenty cents at Bushmore's shipping station 
over and above the Borden price. He had eight cows and his 
feed cost $37.20, and I figured his hay at $16 a ton, and allowed 
thirty pounds per cow a day, and that left him a balance of $81 
for profit for his own labor. This hay he did not raise. He 
cut the hay on shares, so he had to charge that up whatever 
the hay was worth. That left him a profit of $10 a piece on 
those cows, after feeding the hay and the grain. I do not think 
there is a flush of milk in my locality at the present time. I 
account for the flush of milk in 'New York by reason of the fact 
that the price was raised. I talked with Rushmore the other 
day and I am of the opinion from what ho said that all the 
dealers in I^ew York are going to return to the eight cent price 
on the first of April. Milk w^as worth in the six months last 
summer forty cents a hundred above Bordens' price to m,ake up 
into butter and cheese, and if a farmer would establish his cream- 
eries generally he would have a means of establishing competi- 



182 [Senate 

tion until some one could control the cheese market together 
with the milk market. There would have to be a combination 
between the butter and cheese people and those controlling the 
milk miarket in order tO' eliminate co^mpetition so^ far asi the far- 
mer was concerned, and there could be no agreement in that way 
if these cheese factories and butter factories are run upon the 
co-operative plan and the farmer got just what the milk would 
be worth in butter and cheese. As I understand it the Con- 
solidated Milk Exchange is a combination of dealers in l^ew 
York, and the Exchange price means that they will give just so 
much for the milk for that month and nO' more, and they make 
the price once or twice a month as they see fit. It is a disad- 
vantage to the farmer. 

Q. Will you state why it is a disadvantage? A. Well, I can 
remember when the large part of the milk was purchased from 
Dutchess county, down the Harlem road to Orange county, and 
at that time a man had a dairy of forty or fifty cows, he could 
go down to 'New York and sell his milk and get a good living 
price. He made the price. The dealer down there paid him his 
price. Well, he had nothing whatever to say about it to-day. 
He has got eighty cows and the Exchange makes the price for 
a certain month, he can take his milk or he can throw it in the 
gutter. He is under their control. He has not a word to say 
about it. I think the result for the farmer under the present 
system is very bad. 

Benjamin S. Halsey: 

I am second vice-president of thei Sheffield Farms Slawson- 
Decker Company and have been such for about three years in 
April. I have been a director since the incorporation of the 
company. Only as one of the directors, I might be called upon 
to pass the question of fixing the price that my company will 
charge the consumer for milk. I was not consulted at all in refer- 
ence to raising the price of milk on or about JsTovember 1, 1909, 
from eight cents to nine cents a quart. Mr. Horton had charge 
of that entirely. He afterward referred it to the directOTs and 
it was approved. I think the matter was discussed informally 
in September, whether it should be done October first or not, on 
account of the increased price to the producer. I don't remem- 



Xo. 45.] . . 183 

ber coming to any definite conclusion. There was no suggestion 
that we attempt to co-operate with any dealers to raise the price 
of milk. I don't know any of the officers or directors of Borden's 
or of the Mutual Milk and Cream Company, except I used to 
know Mr. Hannahs, of the Mutual. I know Mr. Beakes of the 
Consolidated and Mr. Jord'an, Mr. Smith and Mr. Laemmle. I 
have met one Harrison. The Dairymen's Manufacturing Com- 
pany I know as a corporation. I know L. L. Campbell. 

Louis A. Hamilton : 

I reside at the Plaza hotel and am la director of Borden's Con- 
densed Milk Company. I have been a director since 1902. I^ever 
been an officer of that company. I take no active part in the 
management or the conduct of the company. I attend the meet- 
ings of the directors, but was not in any meeting during the 
month of October, 1909. I don't remember ^any discussion that 
took place in the meeting of the board of directors in reference 
to the advisability of the necessity for raising the price of milk 
on November 1, 1909. I know of no agreement between my com- 
pany and the other companies to raise the price of milk at that 
time. I never talked with any one in reference to advancing 
the price. I know Mr. Harrison of the Consolidated Milk Ex- 
change. It is about ten years since I saw him. I don't know any 
one connected with the Sheffield Farms Slawson-Decker Company 
or with the Mutual Milk and Cream Company. I know nothing 
about standardizing the milk with the separator and never heard 
about a campaign of education to educate the public in obtaining 
higher prices for milk. 

Webb Harrison: 

I am in the creamery business and reside at Middleto\vn, ^. 
Y. Have been dn business six or seven years. We run creameries 
and buy the milk from the farmer and sell it to the retailer, or 
what we term wholesale and retail. Might be called jobber. I 
also have a creamery in Seward, in Scoharie county, and one at 
Home, ^. Y., and one at ^N'ew Centreville, IST. Y. Our milk is 
sold at the platform f. o. b., and consigned to the people here 
or wherever we sell it. Sometimes we sell in Albany and various 
places. We take the milk in at a creamery and either bottle it 



181 [Seis^vte 

or Sihip it in canSj las we can get it, and sometimes in a flush of 
milk, we miake cheese or butter or cream, whatever we think is 
the most advantageous to us, When we have more than we can 
sell. We average per day about 150 to 22 cans. I am a stock- 
holder in the Consolidated Milk Exchange and have been for six 
or seven years. I was la member of the old Milk Exchange, Lim- 
ited. I have been an employee of Borden's, that was eighteen 
years ago. I actually attended meetings of the stockholders or 
directors of the Consolidated Milk Exchange at 6 Harrison 
street. The annual meeting was held in JsTew Jersey. I should 
say the real object of the Consolidated Milk Exchange was to fix 
the values land talk over the general conditions of the market, 
the same as any other Exchange. Explaining just how we nse 
the values fixed by the Consolidated Milk Exchange in 
our business, I would say at the time the monthly 
meeting which we know, we always rather keep tract of them, 
and after the meetings we find out if there has been any change, 
by telephoning to one of the directors or otherwise, and then we 
send a notice. The way I do, I send a notice to the creamery 
which will read, '^ We will pay, starting from this date until 
further notice, so much .a quart, so much a can, so much a hun- 
dred, as the case may be," and that is based on the price as fixed 
by the board of directors of the Consolidated Milk Exchange. I 
am buying milk at the present time at all my creameries at values 
established by the Consolidated Milk Exchange. If a farmer 
should come to me and said he wished to deliver milk to me and 
wanted to know on what basis it would be delivered, I would 
say, ^^ I will pay you Exchange price." In some cases, if he was 
situated near Bordens he might want to base his on Bordens 
price, and if we agreed on that, we would do it. I think Bordens 
and the Exchange price will average about the same. Bordens is 
made every six months and the Exchange price is made at reg- 
nlar meetings, as I understand, of the board of directors for that 
month, and if they think a necessity for a change arises during 
the month, they have a special meeting. I am a subscriber to the 
Milk Reporter. Yes, there are other bases of selling except the 
Bordens and Exchange prices. There is a manufacturer's price, 
which cuts quite a figure sometimes for butter and cheese. I 



Xo. 45.] 185 

mean a manufacturer who is located in the milk shipping ter- 
ritor}'; especially in the northern part of the State, where you 
are located next to the manufacturer, yon have got to consider him 
in }our price. When cheese is very high you have to pay more; 
you have got to get above your Exchange price. If it is low, you 
£>'et a little below, vou follow him. I should think there is about 
as much milk bought on the Bordens price as on the Exchange 
price, if any, a little bit in favor of Bordens. I would say that 
more than 90 ]Der centum of the milk sold to retailers of ^ew 
York city is sold at either Bordens or the Exchange price. Bor- 
dens price and the Manufacturer's price is always considered 
when fixing our value. Accounting for the fact of the raise in 
price from eight cents to nine cents for bottled milk was made 
on or about Xovember 1, 1909, as I understand it; Borden gave 
out their notice about three days in advance, and the rest were 
all ready to take advantage of it ; they knew if Bordens put their 
signs out there wouldn't be any cutting under and taking the 
other fellow's trade, as it vrere, so everybody fell in line. It 
Avould seem to me as if Borden really has the power to raise or 
lower the price of milk in Xew York city on account of its vast 
business and could compel other dealers to follow the lead. I 
advanced my price to retailers on Xovember 1st one-quarter of a 
cent i>er quart. I think that is it. I am getting one-quarter of a 
cent a quart more for my milk than I did the same time last 
year. Our expenses are more, the care of milk principally; the 
requirements of the Board of Health, and caps and various other 
things that we have to use. For bottled milk I am getting five 
cents at present, f. o. b. cars at the station. The retailer to 
Avhom I sell the milk has to pay a little over a cent a quart for 
freight and about a cent a quart for delivery. The bottles are 
supplied by the dealer to whom I send milk. In the months of 
May and June all over five cents that the retail dealer gets would 
be profit. The retail dealer has got to take into consideration also 
the bottle, which costs seven cents, and a bottle will oidy make 
ten trips. In one sense of the word, it costs the large dealer 
more to deliver the milk than the small dealer. The average small 
dealer usually runs a little store and he connects it all up to- 
gether, does all of his own work, and in this way runs his busi- 



186 [Senate 

iiess a great deal more economically; [has no bookkeeper or any 
office expenses. I should think that in the months of May and 
June, that all above six cents a quart that the retail dealer gets 
would be profit, including bottlesi and breakage. At the price 
I am selling now, ^ve cents, and adding a cent for freight and a 
<iei^t for delivery and a cent for breakage, that would make eight 
cents a quart, and if milk was selling at nine cents, it would give 
a cent a quart profit at 12% per cent. I suppose I am a member 
of the Milk Dealers Protective Association. Their principal 
objects seem to be to pick up cans and get them back when they go 
astray. I am not interested in that, because I ship my milk from 
the factory. I pay dues to this society according to the number 
of cans as I ship. About fifteen cents a can. G. C. Weatherhorn 
is secretary. They used to send a letter out for these dues. The 
last letter I received was some time in July. I was then treasurer 
of the Castleton Dairy Company and the letter is in their files. 
The checks were made out to Weatherhorn. The Castleton Dairy 
Company is located at Middletown, N^. Y. In reference to the dead 
wagon, I have heard talked, that if a fellow was cutting in on 
another man's trade, they would have this man on a dead wagon 
go around and see him and see if he wouldn't stop it, and then 
if he would not stop it they would send this fellow around to de- 
liver to customers at a cheaper price and cut in on his trade. That 
is the way I understood it and that is only hearsay. I have heard 
that there have been lots of milkmen's horses poisoned. As to why 
the New Jersey Zinc Company is a stockholder in the Consoli- 
dated Milk Exchange, I think that would be ancient history in the 
milk business. When the milk business was consolidated they 
offered one-half of the stock to the farmers. At that time the New 
Jersey Zinc Company was quite a large producer of milk, and I 
have forgotten the gentleiman's name, although I knew him at the 
time, he subscribed for this stock, and he, I think, died or went 
out of business, and the asses'sment has never been paid against the 
stock. That is the way it came to stand in their name. At that 
time the New Jersey Zinc Company was engaged in the milk busi- 
ness. They had a large farm and the manager of that farm took 
the stock in the name of the New Jersey Zinc Company. That 
was in 1894 or 1895, when the reorganization was made. At the 



~No. 45.] 187 

time the Milk Exchange, limited, was driven out. At the reor- 
ganization thej offered half of this Exchange stock to the farmers, 
and they did all they could to get the farmers to subscribe for one- 
half of the stock. Yes, I have attended meetings of the board of 
•directors of the Consolidated Milk Exchange at which they fixed 
the prices of milk. They called the meeting to order and then 
they would take an informal ballot what they would deem the 
value of milk at that time, and then they would call up the in- 
formal ballot, and then they Avould go around the table and ask 
each one their opinion. Some would give one thing and some 
another. One wanted it down; he had been in the country and 
there was a big lot of grass, etc., and manufacturing conditions 
were so much and all those things ; and if he wanted to raise it 
and the conditions were different, he would tell his opinion, and 
that is the way all the way aroi^ind, and then they would take the 
formal ballot. You could not keep cream as long in the country 
as you could in some of the freezers in the city where they have 
a regular refrigerator. There it is possible to freeze it and as long 
as they keep it frozen it will be cream, but it does not go out in 
the shape that you can use it for anything, only manufacturing 
purposes. I don't think they keep cream two or three months. 
They probably put the cream away in June and use it in July 
and August. The difference in price of cream in June and August 
would probably be $1 a can. Eor those two months there might 
be a charge of thirty-five or forty cents for ice. I know of some of 
the ice cream dealers that do it. The Weed Ice Cream Company 
does it. I think that practice would be confined largely to the ice 
cream people. I believe that Borden's price was always taken into 
consideration in fixing the Exchange price. I don't know of there 
being any agreement among the milk dealers previous to the 1st 
of l^ovember to raise the price of milk. From my knowledge of 
the milk business and the general condition of the milk business, 
I think that Borden's is in a very much more advantageous posi- 
tion to handle milk and not lose anything, than the small dealer in 
the flush of the season, because when there is a flush of milk they 
sell what they can and what they can't they can, and as con- 
densed milk, it brings the price. If at their bottling plants they 
have a surplus of milk they draw it to the condensing plant. 



188 [Senate 

They have a ceTtain pkiit at Micldletown, they are drawing in 
there two or three or four hundred, cans of milk a day. Regarding 
the conditions under which the Bordens are able to fix a price 
six months ahead which comes very close to what the Exchange 
price is for those separate months, Bordens go into all the details,, 
they think they do, for six months, and then, of course, the Ex- 
change from time to time fixes their value of milk, and some- 
times it is a little less and sometimes a little more, but on the 
whole it comes out about the same for the year. I don't know 
any reasion why it does, only the value is about right. I should 
think that would follow from the fact that Borden's prices have 
so much weight with the general market that the Exchange is 
practically bound to follow the Borden's very nearly. If you 
don't get your price pretty near Borden's why thei next contract 
day the farmers all go to Bordens. 

MILK STORE. 
Tone Helfajnth 

I reside at 1332 Park avenue, Manhattan, I have a milk 
store. I bought milk from Liebermann first, then I took from 
Miller Brothers, i^ow I take from LiebeTmann. I know Blef- 
ord. When I took from Lie'bermami I paid $2.20' a can. Then 
Miller came anid I gave him $2 a can, and after that came Blef- 
ford. I buy from him three cans for $1.80, and after I see it is 
a fake business, I don't buy any more. I buy from Miller. 
Blefi^ord said when he offered milk to me that it was a n^w com- 
pany from the country. The reason I knew Blefford was a fake 
business was because everybody told me the stame. Said that 
Bleifford was from Liebermann, from the old company. There 
was no name on Blefford's w^ao;on. He said he was a new com- 
pany. Lieibermann belongs to the Wholesale Milk Deialers Asso- 
ciation. He wanted me to go out to a lawyer and sign a contract. 
I did nr)t sign the contract. I don't know where it is. I did not 
want to buy from Blefford even if I could get it for $1.80 a can, 
because I don't like the Liebermann coTporation. Before I am 
buying $2.12, and. after they give it to me for $1.80. I see the 
fake business. 



Xo. 45.] 189 

]Fi{ED H. Heukstrotek : 

I reside at 556 Madison street, Brooklyn. I was in the milk 
business about two and one^half years ago. Previous to that I 
had been in business for about thirty years as an individual. At 
the last place of business I was in the High Ground Dairy Com- 
pany. I sold out my part of it to Watson. I have been a stock- 
holder in the Consolidated Milk Exchange for about six or seven 
years. I boue^ht the stock. I was not a stockholder in the old 
Milk Exchano-e, Limited. I have never been a director or officer 
of the Consolidated. I have never been an officer, stock- 
holder or director of the Sheffield Earms, Slawson-Decker Com- 
jDany, J3orden's Condensed Milk Company or the Mutual ]Milk 
and Cream Company. Of course, when I bought the stock I ex- 
pected to always know the price of milk without having any diffi- 
culty about it. If it wasn't for the Exchange, everybody made 
his own ])rice. Sometimes I followed the Exchange and some- 
times I didn't. I used to get a postal card from the '' Milk Re- 
porter." I take the '^ Milk ReporteT " too. I paid $20 a share for 
my stock. Theire might be a feeling of loyalty among the mem- 
bers of the Consolidated Exchani2,^e bv which thev would not 2:0 
into each other's territory and compete against each other. There 
wasn't this feeling of loyalty in ,my time. I think the Bordens 
and Exchange prices a\'crage pretty near the same year in and 
year out. I was never a member of the Milk Dealers Protective 
Association. I don't know anvthiug about Bleiford. I have 
heard about the dead was'on. I hear in a general wav that he 
tries to obtain customers by meeting the other man's price or 
underselling him. Yes, I know of the raise in price from eight 
cents to nine cents, but I don't know anvthinfi; about any asree- 
ment among the dealers to raise. There was a gTcat deal of talk 
about it. of course. There was some talk about a meeting that 
Lote Hortou aud Rogers of Borden's and Beakes of thei Consoli- 
dated [Milk Exchange had over in Jersey City. I heard that the 
gentleman just said to me that he was going to have the meeting 
and the price of milk was going to advance. I don't know the 
man who told me. I heard they were going to have a meeting 
three weeks before they had it. The High Ground- Dairy Com- 
pany raised the price to nine cents on November 1st. I know 



190 [Senate 

Mr. Beakes of the Consolidiatecl very well. I also know Mr. 
Laemmle and Lote Horton, but I never discussed it with them. 
It was some milk man that told me about this meeting but I 
cannot remember his name. 

David S. Horton: 

I am secretary of the Sheffield Farms, Slawson-Decker 
Company, and have been such since the spring of 1905. I am 
not a director. I look after the advertising and figure up the 
farmers' accounts each month. When the price raised from eight 
cents to nine cents, I was the one tbat ordeTed the cards. My 
father s-ave me directions to order the cards. I ordered the cards 
the morning that Borden put the notice out. I think that was 
Saturday, the thirtieth of October. They were distributed Sun- 
day morning. I do not know the officers of Biorden's or the 
Mutual Milk and Cream Company, except that I used to know 
Mr. Hannahs. E'arly in the spring I went down to see him 
about poisoning the horses. I never had any discusision with 
him in reference to the contemplated advance in the price of milk. 
I know most of the members of the Consolidated Milk Exchange. 

LoTON Horton: 

I am president of the Sheffield Farms, Slawson-Decker 
Company, and have been such since its organization in 1902. 
We have one company here and we have another one in 'New Jer- 
sey. The New York company owns 95 per cent, of the capital 
stock of the ^N^ew Jersey company and the funds all comiC to this 
company. The profits that are made we put in the treasury o£ 
this company. We ov\m. the real estate of the Jersey company 
and we have a certain number of wagons that we keep there nearly 
all the year round. In the summer time, we send our horses 
from this company down to that company to operate oar business 
through the summer, and send our men; for instance, when our 
trade drops oif here we move our horses to the seas'hore, as we 
call it, both there and Long Island. The business is principally 
at the resorts along the coast in the summer time. Fixing our 
price depends largely upon the conditions in the section where 
we are, what opposition we confront ; for instance, we have oppo- 
sition on the Harlem road where they are mostly all governed 



Xo. 45.] 191 

by the Borden prices; in Vermont, we are in opposition to Bos- 
ton; on the D. & H. road, we are in opposition to Albany; in 
Delaware county, we are in opposition to Philadelphia ; and out 
toward Binghamton we have quite a lively opposition, so wher- 
ever we confront these conditions, w^e have to meet them. For 
instance, if we are in a section where Borden is buying, we pay 
the producer of ordinary milk about the same price as Borden 
does, but if the farmer has 1 or 2 per cent, more butter fat in his 
milk, we pay additional for the butter fat or cream. I think 
we have thirty-three creameries in all. In possibly half, we 
have to meet Borden's opposition. We do not have written con- 
tracts with the farmers, at least not in over three of our 
creameries. I tell them that our prices will be so and so and not 
less than that much. We do not mention Borden prices, but 
should Borden raise we have a form which we fill out and immeh 
diately raise our prices to correspond. We have one creamery 
where we buy on the Exchange basis in our business. This is 
owned by the farmers — a co-operative creamery which w© lease 
from them; we have had it two years and we have a price bascid 
on the Exchange basis. This creamery is located, I think, at 
Eaton. It is the farmers' request that we pay Exchange prices. 
A postal card is sent every time the prices fluctuate, from the 
'^ Alilk Reporter." Our company is a subscriber to the " Milk 
Eeporter." On the Ulster & Delaware R'ailroiad, we get 
about seven carloads a day. There we put our own price and 
our o\^^l standard. On the D. & H. we have four or five creiam- 
eries and we fix the same there. They have a higher grade of 
cows, and thev are willina: to come in and thev make a richer 
cream and we pay for it. Up in Vermont we have opened up — 
that is a butter section. We try to get into butter sections as 
much as we can. Where you find the butter market, you find a 
richer cream. They keep the Hoi steins out. We offer an incen- 
tive to the farmer for his butter fat that will pay him more than 
the ^-alne of the butter, and we buy on that basis. For instance, 
this month's milk might be 4 2/10' per cent, butter fat, 
and in two or three months his cows slack up and his. milk 
w^ill run up and may get five percent. We pay 3 cents for every 
1/10 per cent, butter fat on every 100 pounds. For instance, if 



192 [Senate 

our standard price to-day would be $2 a hundred for a 4 per cent, 
milk, on a 5 per cent, milk he would geit 30 cents advance per 
100 pounds for that milk. In Delaware county they produce 
veiy rich milk, and they have been very siiccessful. They have 
worked on that butter fa,t sys-tem ever since the Sheffield farms 
started. The founder of the Sheffield farms started out on a 
method of th'at business and has always paid for that, butter fat, 
and I believe that the farmers who have followed out these plans 
have been the most sucoessful farmers in producing milk any- 
where, in this State or any other state I have ever visited. In 
arriving at our own standard i>rice, we submit a price ourselves 
and agree on a certain price six months ahead, send it up to the 
farmers ; they read it, and if they are satisfied with it they bring 
us the milk and if they are not they take it to a co-operative 
creamery of their own. The price is made for six months. We 
Jiave a different price for certain months. We have to be gov- 
ei'ned a gi-eat deal by fighting the butter market. Philadelphia 
pays moi'e for butter than ^ew York does and the big operators 
go in there. TTiey put up creameries and this butter is put up 
in prints, and they get two or three cents a pound more, and we 
have got to compete with these people to keep the farmers under 
the restrictions that w^e have, to make it an incentive for them 
to bring us milk instead of going to the Philadelphia market. 
That is one of the hardest competitors that we have. The price 
that we fix is talked over generally by all the Board of Directors, 
and particularly with those having the milk department in 
charge. Bordtns have a creamery about eight miles from us in 
a place called Delhi, anjd their standard at present is $1.90 per 
hundred for 4.1 per cent, butter fat. Our price is, $2.10 for 
4.5 per cent, butter fat. At our standard, we pay $1.98 per hun- 
dred for 4.1 per cent, butter fat. We charged eight cents a quart 
for bottlermilk until October 1, 1907, and at that time we raised 
it to nine cents and continued until the 1st of March. Then we 
reduced it to eight cents and continued at. eight cents until the 
1st of November, 190i9, and that has continued down to the 
present time. We are to reduce the price; to eight cents on the 
1st of March. We raised it the 1st of I^ovember to put it on a 
paying basis. We lost money in OctobeT. Our fiscal year com- 



Xo. 45.] 193 

mences the first day of March. We think we made money every 
month in the year 1909, starting from the 1st of March up to 
September in our whole business, our seashore and everything. 
In ^ew York city, through the months of July and August, on 
our business from One Hundred and Tenth street, and in fact 
about all of the island, we will say from Twenty-third street we 
are divided into three districts. From Twenty-third to Forty-sec- 
ond street, the lower end do^\m heTe ; from there to One Hundred 
and Tenth and from One Hundred and Tenth street up. On 
Manhattan Island above Twenty-third street we lost money in 
July and August in that branch of the business. Xow, in this 
section, we made monev throuo'h the summer; we have a 2;reat 
deal of office trade, and we sell a great many pints at five cents, 
that is remunerative. Xow, in the Bronx, I think we made money 
in July, as I remember it. In August, I think we may be $500 
one way or the other, something like that. I can't remember. 
And in Brooklyn in August we lost money. But our seashore 
business, we sell a great deal, we do a great business in the sea- 
shore, where our sales are possibly from thirty to forty thousand 
quarts a day ; possibly a couple of thousand quarts of cream ; we 
sell that milk from nine to ten cents a quart, except special milk, 
and we sell that from fifteen to twenty cents. In the winter time 
I think our sales are about 75 per cent, household, and '25 per 
cent, that we charge ten cents or more. In the summer time I 
think 50 per cent, of our milk is sold for nine cents or more, 
that is, in the months of July and August. That is because the 
cost of delivery is more at the seashore. We deliver nothing but 
Delaware county selected milk at the seashore. That is ten cents. 
That is the same milk that we sell here the year round at ten 
cents a quart. I consult with my two sons, D. S. Horton and 
C. T. Horton before putting up the price. On October 30th, 
on the morning when he came back from loading the wagons he 
came in and told me that the Borden people had advanced their 
prices, were going to advance thorn the following Monday; he 
came in and said, ^^ Here is a card," woke me up about 6 o'clock 
when he got back from loading the wagons ; so after breakfast 
we were talking about it, and the boy said, ^^ When are you going 
to put up ? " I said, ^^ You will have to get the cards out as 
7 



194 [Senate 

soon as you can," and lie called up the printeir and said lie could 
get them out so we would be able to get them out on the Monday 
following. We went up the same day Borden did. I had talked 
this over with members of the company previously and we thought 
about putting up the price the 1st of October, but we didn't 
think we better raise it the 1st of October. I am a member of 
the International Milk Dealers Association which includes 
dealers in milk in practically every city in the United States, 
and we had a meeting in Milwaukee, and we all discussed milk 
business, and then I went pretty thoroughly over the milk busi- 
ness all through the west, — different dealers to get idea and to 
see if I could find anything or any method where I could main- 
tain my standard 'and do business with less expense than what 
I am operating to-day. We always kept an eye on opposition. 
I don't know the officers and directors of Borden's Condensed 
Milk Comjjany. I know only Mr. Hannahs of the Mutual Com- 
pany. I talked with Mr. Kavanaugh over the 'phone about six 
weeks ago, but I have never met him. We didn't discuss the 
price of milk. I know most of the members of the Consolidated 
Exchange. 

(See testimony, page 3395.) 

I never had any conversation with Mr. Beakes previous to 
l^ovember 1st in reference to raising the price of milk. I know 
Mr. Cochran, head of the Borne Department for Bordens. Our 
company has never been represented directly or indirectly in the 
Consolidated Milk Exchange. Our company is not a member of 
the Milk Dealers Protective Association. We use the separator 
in some of our stations to make cream, either to ship to 'New 
York, or to make butter. We do not use the separator to stand- 
ardize milk, that is make it SV2 per cent, butter fat. I suppose 
that we are the originators of cleansing milk through Sea Island 
cotton ; we use cheese cloth and Sea Island cotton and let the milk 
go through and filter it that way. Of course, clarification is a good 
thing in some ways. I believe in 'bottling milk as near tO' the con- 
sumer as possible, because, by having good help and scientific, 
practical men, I discover all imperfections before it gets to my 
consumer. While it costs more money to build these plants the 
way we build them it is an advance in the Twentieth century, the 



No. 45.] 195 

same as in the Nineteenth century, when we started bottling milk. 
Certified milk is a milk where you have to have a building that is 
built practically on the style of a conservatory, the cows must be 
tuberculin tested; their hair must be clipped around their udder, 
their tail ; these cows, must be washed twice a day, and in hot 
weather and when it is dusty, the room must be sprayed before 
the cow comes in. The farmer must have a building built where 
he can sterilize the clothes; hot and cold water where they wash 
their heads and pare their nails and use vaseline to take milk 
from the cow, and the first tablespoonful must be milked out of 
each teat ; these cows' udders should be cleaned until there is not 
a stain on the. udder, to the very finest, and then it must be drawn 
from the cow with the most care from bacteria. You take a plate 
and hold it up here in the room and you would find thousands of 
thein on a small piece of plate ; and that has got to be put into a 
room Avhere the room is closed down and boiling water, and the 
cans must be sterilized with steam 250 degrees, bottles must be 
sterilized, milk sealed, must have a hermetical seal on it, and 
goes straight from the man that produces it to the door ; and 
they get all the way from eight cents to thirteen cents a quart 
f.' 0. b. shipping station, and we furnish everything but the cows 
and the milk. We charge anywhere from fifteen cents to twenty 
cents for that milk. Probably 95 per cent, of the milk we receive 
is not over thirty-six hours old. We spent $11,000 to hermetically 
seal milk at the rate of two bottles a second because we give a 
safe milk and we must do something that nobody else does. I do 
not remember about any one coming to me in regard to a cam- 
paign of education that had for its object the educating of the 
public up to paying a higher price for milk. I have some figures 
on the relative value of skimmed milk and unskimmed milk which 
I obtained from Mr. Olsen, of the Polytechnic Institute of 
Brooklyn, showing you why I object to bringing skimmed milk in 
the city and using it for food. Milk can be obtained in the stores 
at 6 cents a quart, testing from three and four-tenths to three and 
six-tonths. Now it would take four quarts of milk to sustain a 
man for a day. T lived on it myself for four weeks and did as 
much work as T ever did in mv life. Tn order to live on skimmed 
milk, you would have to buy nine quarts of it and it costs three 



196 [Senate 

cents a quart at the store, making a total cost per day of twenty- 
seven cents. Therefore, skimmed milk is going to cost you three 
cents more than pure milk, ^ow, why would you bring skimmed 
milk in the market ? 

(See pages 3444, 3445, and 3446 for relative food values, and 
cost per day; see also pages 3449 and '3450 of testimony.) 

Adolph Huth: 

I live at 150' Freeman street. I am manager of the iSTew York 
Dairy Produce Company of 155 Freeman street. I am an officer 
and director. I am treasurer. I attended a meeting in Williams- 
burg. I think it was the 1st of I^ovember, at Lorrimer and Ten 
Eyck streets. I think it was six or seven days after the 1st of 
I^ovember. A Mr. Wierk, president of the company I work for, 
asked me to come. He said they were going to discuss on the 
price of milk to the consumer. Mr. Oher of the National Dairy, 
Mr. Ryder, and one man from the High Ground Dairy Company 
were there. I got there late but I think there were about ten or 
twelve men there. Mr. Lieberman was acting as chairman. When 
I got there I did not hear much that he said but they were talking 
about raising milk from eight to nine cents. Lieberman said he 
thought it would be a good thing if they had a uniform price. 
Oher said he would raise providing everybody else would raise. 
So far as I know the majority came to an agreement to raise the 
price to nine cents. I did not raise. Wierck said he would like 
to raise my company to nine cents. I told him I could not raise 
it to nine cents. Ryder, the JSTational Dairy Comp'any and I were 
the only ones that did not raise the price. We are in a poor 
neighborhood of factory people. The first week in November 
Chris Oher, Ryder and I met at my office and concluded to raise 
milk to nine cents on the 15th of November. James C. Ryder was 
the first to break the agreement. He told me the Saturday before 
that he would not raise the price. I have been selling all the 
time at eight cents. I have been able to make both ends meet 
by taking off a wagon and working myself in between. At the 
meeting I spoke of, he never referred to it in my presence. Mr. 
Ryder and Mr. Oher and I agreed to raise the price on November 
15th. Mr. Wierck was also present. 



No. 45.] 197 

MILK DEALER. 

George Ihxken : 

I reside at 194 19th street, Brooklyn, and have been in the 
milk business since 1873 individually. I have stations in the 
country located at Sparta, N^. J., Stockholm, ^. J., Kellam, Pa., 
and Oquaga, N. Y. All of my business is done in Jersey and 
Xew York. I sell in Jersey to other dealers. I don't run a 
retail business. I am a stockholder of the Consolidated Milk 
Exchange and a director. Been a director about five years. I 
have been a stockholder in the consolidated since its reorganiza- 
tion. So far as I know the Consolidated Milk Exchange did not 
deal in milk, that is, buying and selling milk. At the meetings 
we agreed on the value of milk. I have attended special meetings 
of the board of directors to consider the value of milk. I used 
to get a postal card and the '^ Milk Reporter '' by which I found 
the values that the board of directors had arrived at. We fixed 
our prices mostly on the exchange valuations. Pay more or 
less. I have no contract. When the ^Drice goes up or dovni I 
jDOst it outside of my dairy. I say I will pay the same as Bor- 
dens and on the notice I state we will pay the same as Bondens 
pay. I don't know as the figaires are on. There is nothing 
binding about my agreement with my customers. It costs on an 
averag'e to handle one quart of milk from the time that you receive 
it from the producer until the time that you deliver it to the 
consumer about one-half a cent for bottlins: and a little over a 
cent for freight and about one-half a cent to bring to him. I 
figure that the milk stands me six and one-half cents when I 
get it home, that is, at the present time. I sell for eight cents so 
I get out on the wrong end of the horn when the month is up. I 
have one wagon that can put out 400 quarts. It runs from 
Thirty-ninth to Forty-third streets, four blocks one way and three 
or four blocks the other way. One man will leave eight or ten 
quarts in a house, and he can do it quicker than if he drives a 
mile to leave the same amount. I run one route clean down to 
Fort Hamilton. If I have a great many quarts to deliver in 
one immediate locality I can deliver it cheaper. I should think 
that would account for Bordens being able to make deliveries 



198 [Senate 

cheaper than I can, that is, thej deliver to a large number of 
customers in an immediate vicinity. I don't know as I have any- 
thing else to say on the subject than if the thing was all under 
the one head and you could district your routes, you could sell 
milk cheaper than you do now, that is, make certain districts 
for one wagon. Right in my street there are five milk wagons 
go through. 'Now, one wagon could serve eight or ten blocks 
around and all of that expense would be done away with. A 
case of milk, iced, will weigh probably from eighty to eighty- 
five pounds. By platform prices, the supply and demand would 
make the platform price. If I was very short and another 
dealer had a few cans there and he wanted to sell it, he would 
put a premium on it and I would have to pay it if I wanted it. 
I take the ^^ Milk Reporter." I am a miember of the Mutual Aid 
Society, the insurance business, that is, I am an insurer. I have 
stock in the Dairymen's Manufacturing Company. Thirty-three 
shares. I wish to state that I have never heard of any milk trust 
and do not know how one could exist. I am simply selling milk 
at eight cents. I am losing some money on it but I am getting 
soime trade. The reason why I follow Bordens is because I am 
three miles from one of their large stations, and unless I pay 
the same as they do I probably would not get any milk. They 
is competition between myself and Bordens. Whenever the price 
is dropped to us by farmers we drop it to the dealers. 

JoHN^ Jettee: 

I reside at 439 Hudson street, and have been in the milk busi- 
ness for twenty years individually. I receive my milk on the 
milk platform, Delaware, Lackawanna & Western, Hoboken. I 
am a member and a stockholder of the Consolidated Milk Ex- 
change. I own five shares. I was a stockholder in the old Milk 
Exchange Limited. I was never an officer or director. I have 
atteuded meetings of the stockholders of the Consolidatedi Milk 
Exchange. I don't think I attended its meetings more than half 
.a dozen times since its existence. I guess the last meeting I at- 
tended was within two years. The last meeting that I attended 
was at Harrison street, I believe. That was a stockholders' meet- 
ing. Yes, I know it is a New Jersey corporation. The reason 



i 



Ko. -15.] 199 

I joined it is, in olden times we used to have a great time about 
putting a value on milk, and oftentimes this one wasn't there 
and that one wasn't there, and I thought the people went up the 
country and knew about the countrv, and how such thinos are 
situated, would be a good thing to have such men there and find 
out the value of milk. 

Q. Is that of any use in your business? 

I think it is a good thing to have a standard by which the 
price of milk can be made uniform. It wouldn't do in business if 
one man paid a great deal more than another and went out to the 
country to buy here and there, and in one place he pays so much 
more than in another place. He couldn't very well keep up with 
those people who bought cheaper through the country if he didn't 
know the prices, about the valuation. I always see the valuation 
in most any newspaper, in the " Journal " or " World " or " Milk 
Reporter." I would also get postal cards. I buy my milk simply 
on the valuation that is put on it from time to time by the ex- 
change. I advanced the ])rice of milk on Xovember 1, 19'0'9. I 
solcf to dealeirs, that is, stores, etc. I don't sell bottled milk. 
Whatever advance I made about November first was simply the 
ordinary advance in accordance with the valuation arrived at by 
the exchange. I am a stockholder in the Dairymen's Manufac 
turing Company. Own fifteen shares. I buy my milk from 
creamery men. 

Charles E. Johnsox : 

I have a farm which I work, located at Goshen, I^. Y. I have 
been a dealer and have produced milk since 1872. I own forty- 
eight cows and produce on an average of about three hundred and 
twenty quarts per day during the present season. It would 
hardly average that the year round ; I produce more during the 
months of May and June than during the other months. I own 
five shares of stock in the Consolidated Milk Exchange. My 
shares of stock came from my father. I derive a benefit as such 
stockholder as follows : If they vote on the price and two di- 
rectors of the exchange are farmers, and their vote raised the 
price, it is a benefit to me and their argumeait ought to be of 
benefit to me as it would raise the price. I sell my milk at prices 



200 [Senate 

that are fixed by the board of directors of the Coiisoilidated Milk 
Exchange. I have sold my milk in this manner ever since the 
Consolidated Milk Exchange was organized. This price is pub- 
lished in the local paper. There are seventeen directors, two of 
which are '^ Simon-pure '' farmers. I never attended any meetings 
of the board of directors or of the stockholders. I sell my milk 
to the Orange County Milk Association. I make agreements 
for the sale of milk in March and September, said agreement 
being in writing, and in which they require us to conform to the 
rules of the board of health and then agree to pay us the exchange 
price. I suppose every man in my locality that sells milk to them 
has a similar agTcement. The cost of production consists of re- 
pairs to farm, cows to keep in shape, labor of producing feed, and 
fodder. The exchange always paid the exchange price, never any 
more, that I remember. The prices fixed by the Consolidated 
Milk Exchange for the year I'D 10 average in the neighborhood of 
three and one-half cents a quart. At that price, I did not make 
much profit. When the price of milk was raised the first of 
!N'ovember by the dealers of ISTew York city (bottle milk ffom 
eight cents to nine cents) I did not get a proportionate advance in 
the milk that I sold to the Orange County Milk Association. I 
got a raise of one^quarter of a cent on the 23d of November. It 
costs me, at the present, about one and one-half cents to produce 
a quart of milk, that is, only for the feed bill ; that does not in- 
clude help or any recompense for my service or the value of the 
cow. I could not tell just what it would cost to produce milk at 
a fair profit. I believe there is more money in selling milk at 
four and one-quarter cents a quart at the station than there would 
be in manufacturing it into butter. 

Joseph V. Joedan: 

I reside at Newburg. I am a milk producer and a dealer in 
milk, cheese and dairy products. I have been a milk dealer for 
twenty-one years in a corporation — the Hudson Valley Dairy 
Company. I am its president. It is incorporated under the 
laws of the State of 'New York, with a capital stock of $60,000. 
I own the majority of the stock. I think we paid 10 per cent, 
in 1907 ; I think in 1908, w^e paid 10 per cent ; I think we paid 
more in 1909 than we did in 1908 — about 12 per cent. I own 



Xo. 45.] 201 

quite a number of creameries in the country. We have one at 
East Fishkill, Dutchess county, Brinkerhoff, Dutchess county, 
Walclcn. and East Walclen, Orange county, Plattskill, Ulster 
county, and at Xew Kingston, Delaware county. Those are the 
only ones in operation. We have some that are not in operation. 
I was not a member of the old Milk Exchange, Limited. I am a 
member of the consolidated. I bought my stock about ten years 
ago. I don't know how much stock I have, as I have bought some 
from friends since. I was a director of the consolidated. I have 
not been to a meeting in the last year. I did not attend the 
meetings. I do not see what use the exchange is any way. In 
my judgment, milk would not vary one-eighth cent a quart 
whether the exchan2:e existed or not. I have never been an officer 
or director of the Bordens, Sheffields, or the Mutual Company. 
K^ever interested in any way. The resolutions adopted were 
similar to the one on I^'ovember 28, 1906, which was read from 
the minute book. My farm is one of the largest in the state — 
3,000 acres. I think the exchange valuation at present is four 
and one-quarter cents. That is what is published. We are pay- 
ing that price at one of our creameries. At another, we are pay- 
ing four and one-eighth cents ; at another, four cents and in some 
places we are paying five cents. I am a stockholder in the con- 
solidated. I saw the exchange prices in various newspapers. I 
used to take the " Milk Reporter '' but do not now. Most of my 
milk is sold in Xewburg and the immediate vicinity. I think 
Mr. Laemmle is secretary of the consolidated at the present time. 
I do not sell any bottle milk at wholesale unless it is a case or two 
occasionally. We use the separator in one place in Delaware 
county. We make cheese of the skim milk and the cream is sold. 
I never used a separator for purifying the milk. I think I re- 
ceived a dividend at one time on my stock in the consolidated 
three or four years ago. Probably 6 per ceat. — I do not remem- 
ber. The consolidated held some real estate. It derives its in- 
come from the rentals of the real estate, and dues. I do not 
know what my object was in becoming a stockholder and member 
of the Consolidated Afilk Exchangee. 

(Witness is shown the minute book of the special meeting of 
the directors held November 19, 1908, which reads, " Special 



202 [Senate 

meeting was called at the request of Messrs. Howell, Hunteman 
and J. V. JoTdan," and witness says:) 

^' I don't believe that the minntes are correct, because I don't 
believe that I was a party to any call^ because I had taken so 
little interest in late years." If cream is iced, it should be 
fresh three or four days or a week. We sell some cream. It is 
shipped by rail and boat. I think the freight rate by boat is 
thirty-two cents — twenty-six cents by rail. I think we shipped 
about 10 per cent, or 15 per cent, of our milk by boat this sum- 
mer. The freight on the boat is paid by the consignee. Our 
price is f. o. b. shipping station by rail. I do not control the 
making of the contract for freight. My milk comes down by the 
Central Hudson Steamboat company. It stops at Cornwall, West 
Point and Highland Falls. There is a flush of milk in my local- 
ity at the present time. I have 119 cows. We have a surplus at 
the farm and also where we buy in the different places. It costs 
me more to produce milk than most anybody else because it goes 
to the United States Covernment from my farm. We are under 
contract to produce it in a very cleanly manner and use extra pre- 
cautions ; for instance : I have two men every day in the stable 
cleaning the cows, grooming the cows, and all those expenses run 
up into money when you produce milk. Everything is madie vc'ry 
cleanly for the Military Academy. I have no idea what it would 
cost the ordinary farmer to produce a quart of milk. My judg- 
ment is that the proper and fair way to buy milk is on the butter 
and cheese test. 

James J. Kavanaugh : 

I am president of the Mutual Milk & Cream Company. I 
have been such since this last April. I have been a director about 
three years. I was a driver for the company once. I was fore- 
man of one of their departments for a while. We have three 
diiferent prices which we pay the producer. Sbnie we pay Bor- 
dens price, some we pay exchange and in some places we pay 
independent prices of our own based upon what we think milk 
is worth. I think we have thirty-five creameries, the greater part 
of them are located in K'ew York State. I think Bordens price 
rules in half of the creameries, exchange price in about a half 
dozen, and the balance our own price. W^e base our prices on the 



No. 45.] 203 

butter and cheese market. That particular part of the country 
is a butter and cheese country, on the Rutland railroad and on the 
Rome & Watertown, and I think we have paid higher prices than 
exchange and Bordens. I do not believe there has been much 
difference in the exchange and Borden's prices in the last two or 
three years. I find the exchange price from the "' Milk Reporter.'' 
They generally send a postal card around. I subscribe for the 
" Milk Reporter " and pay twenty-five centsi extra for the postal 
card. When we receive the postal card we send a notice to the 
creameries that the price is that much higher or lower until fur- 
ther notice. We ha\'e no Vepresentative on the exchange. I don't 
remember but I believe some years^ ago some member of our com- 
pany was connected with the exchange. I think the company was 
formed in 1898. When I was in the milk business alone I was 
supplied by the Rockdale Company. They based their charge 
around the exchange prices. Our company raised the price on 
the first of November from eight to nine cents a quart for bottled 
milk. We sold together between 1 50,000 to 60,000' quarts of 
milk a day. The retail percentage is small. We are in the retail 
business about three vears. Most of it is wholesale. When I 
first came in the company there was no retail business. When 
sold wholesale, we did what the customer wanted. We buy at a 
stated price in the country but the average store will not buy 
except on exchange price. The Milk Dealers Protective Asso- 
ciation sell so much above the exchange price. Some places when 
I was in business I got more than thirty-eight above exchange. 
In majority of cases they buy twenty-eight and thirty-eight above 
exchange price. During the month of October we discussed the 
comtemplated raise of the price of bottled milk repeatedly among 
ourselves. That is the executive committee. This is some time 
after we put out our winter price. Some contracts for the winter 
were for six months and some based on a monthly price. At the 
discussion we realized the fact that if we continue to sell milk 
during the winter months at eight cents we would face quite a 
loss, and we also said it was suicide to raise it unless Bordens 
did. They did not, and they went along all October and sold it 
for eight cents. We could not raise our price unless Bordens 
did without losing our trade. I think that Bordens controls 50 



204 [Sex ATE 

per cent, of the retail business. I found out on Saturdav that 
Borden had raised the price. There was a notice on mv desk. I 
had a discussion with some of the executive committee and we got 
our notices the same day and sent them out on 'Sunday morning. 
I told our people that now Bordens have raised their price and 
there was only one thing for us to do is to. follow suit. I did 
not know at that time that Sheffield had raised the price, but 
I think later in the day someone called me up and asked me what 
we had done, and I told him we had raised it to nine cents. I 
do not know any of the officers or directors of B'ord'ens. Mr. 
Beakes once called me up on the telejohone. I think it was in 
October and I said to him it looks as though we are going to lose 
a barrel of money this winter if Borden don't put their price 
up, and I asked him whether he knew if thej were going to or 
not, and he said he didn't know. I told him we would go up 
if Bordens went up. I would not swear the Mr. Beakes did not 
say to me that he was going to see the representative of Bordens 
in order to advance the price of milk. He may have said it ; I 
do not remember. He did not sav anvthina: about Sheffield at that 
time. I think the most of the conversation was in regard to cans, 
buying cans. About the first of October Mr. Van Bomel and 
Mr. Tuthill of the Sheffield farms came to get some information 
in regard to some horses that were poisoned on them, and I said 
to them at that time that I expected the price of milk would go 
up to nine cents the first of October. Unfortunately it did not. 
Bordens did not put it up. I said if they didn't go to nine cents 
you would lose a lot of money. They are the only gentlemen 
I know of the Sheffield Company. Witness showing list of mem- 
bers of the Consolidated Milk Exchange savs he knows C. H. C. 
Beakes, John P. Wierck, Thomas O. Smith, W. B. Conklin, 
Webb Harrison, Chris Vagts, Slaughter and M. L. Sanford. We 
have no representative on the Consolidated Exchange, but when 
we did have one it was John Kroos. We bought the Sanford 
business and I believe we requested them! both to resign shortly 
after we bought the business. That, was about three years ago. I 
think Mr. Kroos was president or vice-president and he was also 
a member of the exchange. He is still connected with our com- 
pany. He manages one of our branches. He is no longer a 



Xo. 45.] 205 

member of the Consolidated Mlk Exchange as I know of. My 
company belongs to some insurance society but I do not know the 
name of it. We bought Mr. Sanford^s business! and we had no 
further use for him, and I believe the board of directors decided 
to let him go, and in the event that they wanted his services, 
at any time, paying him at the rate of five dollars a day. If we 
had a customer that we bought out from him who was dissatisfied, 
and w^e had some trouble and were going to lose them, we would 
send for Sanford and he would straighten it out, and he is living 
in a central location, around Warwick, and whenever we want 
anything done in those places it is cheaper to have Sanford do it 
than to send a man from Xew York. I was not aware that San- 
ford was a member of the consolidated until I saw his name. We 
did not authorize to go around and see milk dealers in reference 
to any agreement to put up the price of milk, and he never did 
so to my knowledge. My. company is not a member of the Milk 
Dealers Protective Association. 'No ofiicer of our company be- 
longs to it. About last April or May, shortly after I came into 
office as president, the Milk Dealers Protective Asisociation sent 
word to me through Mr. Arnstein that they w^ould like us to 
join their association, which they informed us was a can bureau 
and social organization of the milk dealers, and they said a great 
many of the dealers in New York and Brooklyn belonged to it. 
I refused, and so Mr. Ai-nstein said afterward we ought to be^ 
long. It w^ouldn't hurt anything. I said ^^All right, Arnstein, 
you can join this association, but we won't join it as a company, 
and we will pay your dues whatever they amount to," and he 
did, and he belonged to it until along about the 1st of November. 
I remember in October I told him to resign — that he was losing 
too much time attending the meetings, and I told him to resign 
and I think he put it off until probably, the fifth, sixth or sev- 
enth of November, and then he wrote them a letter and I told 
him he better register it and get a receipt for it, and he has done 
that. Mr. Arnstein told me they were more of a social organiza- 
tion than anything else. They wanted to get up some system of 
collectins: our cans. Thev also wanted to make some kind of a 
protest against the law in Albany whereby we were fined for 
milk containing less than 12 per cent, of solids, where the cows 



206 [Senate 

gave it, which of course, we were. We established a price of 
thirty-eight cents a can above the Exchange price. I never heard 
that the protective association established that, I may have dis- 
cussed with Arnstein the advisability or necessity of raising the 
price of milk. We have often discussed it among ourselves during 
the month of October. I never heard of Mr. Bleffort. I do not 
know of the general system among the milk dealers of the pro- 
tective association to prevent the selling of milk at a less price 
than they established it. We use separators in several of our 
creameries for making cream. We make caseine and pot cheese 
of skim milk — we have a contract with the Caseine Company 
of America, or one of its subsidiaries. Caseine is used to make 
buttons and billiard balls. It is a solid of the skim milk sepa- 
rated from the whey, separated from the fresh skim milk by 
sulphuric acid. I believe skim milk is a healthful food, but to 
bring it into ^N'ew York I do not approve. I am afraid the repu- 
table dealer would be at a disadvantage by handling it, but that 
is the only objection. I believe it is a good healthy food. We 
never use a separator for standardizing milk. I do' not believe 
that milk containing 3 per cent, butter fat would comply with 
the law, that is, I believe, 3 per cent, fat and 12 per cent, solids. 
I would say that all of our milk is less than forty-eight hours 
old when it is delivered. There might be in the winter time, 
where it was affected by snow storms, there might be some hard- 
ship. The most of our cream comes from the thirty-two-cent 
zone. We have kept cream where we would have to have a large 
supply, like in anticipation for the Fourth of July for several 
days ahead, but not generally. Condensed milk, if it is properly 
cured, improves in flavor by being a few days old. We manu- 
facture condensed milk in an unsweetened form only. We buy 
some milk from Canada on the Rutland road. We have to pay 
a duty of twenty-five cents on every eighty pounds. Then there 
is $3 entry fee and there is a fifty-cent fee we^ pay for 
drawing up papers. We pay this same price for the milk from 
Canada as for milk from here; if they bring it across they have 
to pay a duty. If you were approached by some one in regard 
to the campaign on education, I claim that the milk dealers were 
:abused and pounded by the public in general, and he said that 



[N'o. 45.] • 207 

they were getting up a series of educational articles to let the 
public know how the milk was produced and taken care of and 
the cost of delivering it in a sanitary condition in l^ew York, and 
he asked for some subscriptions toward the matter Avhich I re- 
fused. I think he said the Beakes Dairy Company, and I am 
not sure whether he mentioned the Sheffield Farms. We have 
some contract for selling milk Avholesale for four and three^ 
quarters cents a quart. We lose money on these contracts at the 
present time. We would not lose money in the summer. All 
those contracts cover a year. We might make a little profit dur- 
ing the whole year. We pasteurize all of our bottle milk and 
heat it to 150 and bottle it and ice it and then deliver it to our 
other distributing plants and deliver it to the customer. Our 
retail wagons only serve 150 to 175 bottles of milk, whereas a 
wholesale wagon can sell about sixty cans of forty quarts each, 
and we average about twelve trips. I know in our businesiS we 
put in about two carloads of bottles a month. We figure 
it costs us about one-quarter cent per quart to pasteurize 
and one-third cent to bottle, and all additional cost per 
bottle is for delivery. We deliver about 2,40'0 quarts of 
milk with a man and two horses in less time than it 
takes to deliver 160 quarts with one man and one horse. I am a 
stockholder but I do not remember of any rule whereby stock- 
holders geA the milk at five cents a quart. They used to sell it 
at seven cents when it was eight and eight when it was nine cents 
to stockholders. I have one condenserv located in Pulaski, Xew 
York. Our milk is pasteurized in the city. I think that the 
public would benefit if all milk had to be pasteurized but it would 
be a hardship to the small dealer. We were experimenting last 
Saturday and we had our milk tested for bacteria before it was 
pasteurized, and I think it tested something like 2i5O,000 per 
cubic centimeter, and pasteurized it and rendered it sterile. I 
think it is little cheaper to bottle milk in the country than to 
bottle it in the city. I am a believer in pasteurization. It may be 
that many of the bacteria that are killed by this sterilization are 
bacteria that are harmless and are bacteria that kill the offensive 
bacteria and are thus harmless. I think some time last winter 
we paid an assessment of $500 to the Milk Dealers' Protective 



208 [S'ENATE 

Assiociation. I'liey wanted some kind of a fund in tbeir treasury. 
I believe they wanted to fight this law, this 12 per cent, solid 
law, where the cows did not give it. Mr. Arnstein explained 
that to me. I think Mr. Arnstein collected fifty cents every once 
and a while for dues from the Holland branch, the West Side 
branch and the East Side branch. I have no idea of the total 
amount that was collected by the Milk Dealers' Protective 
Association. 

John H. Keheek : 

I am secretary and treasurer of the Mutual Cream and Milk 
Company. I have been such for three years, in March. I have 
been a director for the same period of time. I was clerk, collector 
and superintendent. Prior to that time I have been in its 
employ since its organization. I look after the collection, a part 
of the correspondence, and I am also purchasing agent. As a 
member of the executive board I have something to do with fix- 
ing the price my company pays the producer for milk. As soon 
as we saAv what Borden's prices were, when they came out the 
middle of the month, we knew that we had to raise our price. 
The cost of bottled milk would be more than eight cents, it Was 
discussed from time to time in meetings of the bo'ard about Mr. 
Kavanaugh calling up our company to fi.nd out what we are going 
to dc. I never consiulted with any one outside of our company 
about the necessity of raising the price of milk. I know none 
of the officers or directors of the Borden's Condensed Milk Com- 
pany. I know Mr. Yon Bomel of the Sheffield Farms^Slosson- 
Decker Company. I think I saw Mr. Yon Bomel about a year 
ago. I never talked to him in regard to raising the price of milk. 
I know Mr. Beakes of the Consolidated Milk Exchange, and Mr. 
Smith ; I have met Joseph Laemmle. I know Mr. Ferist. He is 
a stockholder in our company. I have met Mr. Chardavoyne, 
Mr. AYebb Harrison, George Slander land Chris Yaghts. I think 
I have met E. B. Sanford. I know Mr. Conover 'and M. L. San- 
ford and George E. Beakes. I think that is all I know. Mr. 
M. L. Sanford is the only one that I remember seeing. I did not 
talk to him about raising the price of milk. I think Mr. San- 
ford looked after five or six of our creameries. We employed 
him to do that because he ^vas located half way between those 



Xo. 45.] 209 

stations and it was cheaper to send him up there. It saved car 
fare. In the Milk Dealers' Protective Association we are repre- 
sented by one member of our companj, Mr. Onstein. Mr. 
Tietjen is an employee of ours but he does not represent us. I 
never attended the meetings of the Milk Dealers' Association. 
Our people would not belong to it as a company and Mr. Onstein 
wanted to join and they had no objection and I belie^'e we were 
to pay the dues. We did not want to tie up with any protective 
association. Mr. Onstein is a stockholder in our companv. The 
amount we paid for him was $500. Mr. Van Hof had been in 
charge of the retail department but a short time, and I believe 
that he wanted to see the price stay at eight cents so that he 
would get a lot of business. Mr. Ka^^anaugh ordered Mr. Onstein 
to resign from the protective association. He told me he was 
losing too much time at the meetings. I should say off-hand, we 
sell about twelve to fifteen thousand quarts of milk per day in 
bottles, and about 140,000 quarts in cans. There is one 
thing I Avould like to add. The other day you asked me 
to look up whether we sold milk to stockholders for four or 
five cents per quart, and I found out we did. That was in 1907. 
The question you asked was did we sell milk so that we can 
resell it. We did sell it to them at four and five cents, loose 
milk for their own personal use, and we did sell them bottled 
milk at six cents when we first went into the retail business. 
When our company was organized it was composed m^ainly of 
small dealers that went into the Mutual and made this large 
corporation. There was an agreement made lat that time that all 
the dealers that went into the Mutual should not go into the 
milk business in their own name for twenty years after they 
sold to the Mutual. Some of them do business now but I think 
we gave them permission to do that. They have never been 
molested by us. 

MILK, BUTTER AND EGG STORE. 

JoHi«^ Keogh : 

I reside at 230 East Forty-eighth street. I am in the real 
estate business and have got a milk, butter and eg^ store. I 
was in the milk business twenty-five years but I sold out five 



210 [SlE^-ATE 

years 'ago. I had the store all the time. My place of business 
was at 37 Catharine street. My store at present is at 87 Cath- 
arine street. I haven't any dairies. I own a farm and the stock, 
a number of cows, but I don't run it mvself. My brother runs 
it. I hold a half share in the Consolidated Milk Exchange. 
I think I lattended the first and second meetings of the Consoli- 
dated Milk Exchange. I think in 1899. I was never la director 
or officer. I am not connected with Bordens or Sheffield^ or the 
Mutual Milk and Cream Company. As to \Vhy I bought the 
stock in the Consolidated Milk Exchange I would say, before 
the Milk Exchange there was a great deal of trouble in the 
making of prices ; everybody was shouting for their own price 
and I had more or less trouble with the farmers; but after I 
joined the Milk Exchange and I told them I was buying milk 
on the Milk Exchange price, I had no trouble since. I subscribe 
for the ^' Milk Reporter." If the price changes, they send me a 
postal card. I never had a written contract with a farmer in 
my life. The nuajority of my contracts with the farmers, that is, 
agreements to sell to them, were at the Exchange prices. If they 
raised the price, I would have to pay whatever they made the 
price. Yes, I heard about the raising of the price of milk on 
November 1st from eight cen'ts to nine cents. In fact, I pay it 
myself, when I don't bring the milk uptown, I pay nine cents. 
I did not raise the price of milk that I sold in my store. I sell 
labout seven cases of bottled milk a day. I charge eight cents 
for bottled milk. I sell dipped milk. I charge eight cents for 
that, but we give a little over measure. In the dipped milk we 
realize about six and one-half cents, but six cents in the summer. 
My prices have been the same for thirty years. My bottled milk 
is sold over the counter. I don't deliver any o¥ it. I would 
like to say that I don't believe that milk can be sold for any less 
than nine cents a bottle by the small dealer, and thait I would 
not sell it, only my driver suggested to me that he w^ould have to 
sell it for eight cents because there are a good many poor people 
in his neighborhood on his route and that is the only reason. 
I am not looking for bouquets because I sold it for ten cents 
twenty-eight years ago and sold all the milk I had. 



N'o. .45.] 211 

Joseph Laemmle : 

I reside in the city of ^ew York and have been in the milk 
business since 1872, and at present am president of the Laemmle 
Dairy Company, a Xew York corporation, with a capital stock of 
$20,000, of which I own about 50 per cent., w^hich was organized 
in 1906. My son and Jacob C. Wund Lre secretary and treasurer 
and vice-president, respectively. We have no branch offices in 
'New York. We have stations in Onondaga, Otsego, Rensselaer 
and Tioga counties. The stock in my company was issued for 
creameries, machinery, etc., used in the business, none for good 
will. I am not connected with any other milk corporation. I am 
a stockholder, director and officer of the Consolidated Milk Ex- 
change, and have been since its incorporation, and I was a member 
of the Milk Exchange, Limited. I do not think I was an incorpo- 
rator of the latter and was only a director thereof for some years. 
The Milk Exchange, Limited, was organized about 1882 and con- 
tinued to do business up to 1895, and our last office was at 
Harrison street, New York, formerly at 2'0 Xorthmore street, New 
York city. I don't know how long we were there. We were at 
6 Harrison street for the last four or five years of the existence of 
the corporation and I think the office was there — at 6 Harrison 
street — when the suit to dissolve it was begun. I remember the 
suit and I remember it was dissolved and the Consolidated Milk 
Exchange was organized in x^ew Jersev shortlv thereafter — 
^^ about the same members" — '^pretty good men." We held the 
early meetings of the Consolidated Milk Exchange near the ferry 
in Jersey City and continued there until about 1900, with a branch 
office at 6 Harrison street, where w^e have held meetings occa- 
sionally since; most of them at 6 Harrison street, Xew York. The 
Milk Exchange, Limited, did do business — a milk-selling com- 
mission business. 

Q. What did they do in reference to the prices of milk ? A. 
They consulted the general conditions and looked after the general 
welfare of the business and supply and demand, and guided the 
general condition of the market, the higher and lower price through 
the year according to the supply and demand and the production 
of the goods. After a discussion, a consensus of opinion was ob- 
tained as to the value of milk. This price did not govern the 



212 [Senate 

members of the Consolidated Milk Exchange ; there was no by-law 
requiring the forfeiture of the stock unless a member conformed 
to the prices set by it. I don't remember the by-lawsi of the Ex- 
change, Limited, referred to in the opinion of Judge Haight. I 
don't remember that any such by-law was ever acted upon. I 
think a card was sent to the directors of the Milk Exchange, 
Limited, to advise them of the action of the board. I was not the 
secretary then. 'No notice was sent to stockholders. I believe a 
little milk journal published the value placed by the board and 
it was mailed to the stockholders. Mr. M. C. Hall, a reporter, 
supplied this information to the paper, and I guess the '^ Milk Re- 
porter " furnishes information to the public of the action of the 
Consolidated Milk Exchange in practically the same way. 

Q. In other words, the work of the board of directors of the 
Milk Exchange, Limited, and the Consolidated Milk Exchange in 
arriving at prices was practically identical ? A. 'No, it is not. 
The difference is that the '^ Limited " did a commisision business. 
'' We never make prices in the Exchange, I mean on the Consoli- 
dated Exchange." It was always what we call the supply and 
demand were discussed and the shortage or the flush of the market, 
and the price of butter and the price of cheese and the price of 
other by-products, what milk had to be worked up into, such by- 
products were considered, and then what they call they found that 
value and expressed the value in the milk market. 

Q. And that list of values was gotten up by the Milk Exchange, 
Limited, wasn't it ? A. There was never no list made up. The 
newspapers then, the same as now, get up the news to publish in 
their papers for the benefit of the public and the reporters came 
to the Exchange for information. The method of arriving at 
values in the Milk Exchange, Limited, and the Consolidated Milk 
Exchang'e, I believe was about the same, the difference being that 
the Limited arrived at prices and the Consolidated said nothing 
about prices at all. The Consolidated investigated the value of 
milk. The method of arriving at values by both companies was 
about the same, except that the Milk Exchange, Limited, did a 
commission business. The Consolidated Milk Exchange sells no 
milk, but looks after many other things, such as stolen cans, stray 
cans, bad bills, salaries of officers of the corporation, " a thousand 



^o. 45.] 213 

different things which we have to look after." We attend to cer- 
tain things of common interest to milkmen. There are many 
things Wsides arriving at a value of milk that the board does. 
The new rules and refirulations of the board of health and the 
Agricultural Department have to be looked after. Milk has ad- 
vanced owing to the high price of butter and cheese and the pro- 
ducer has had his selection of dealers. ^' He didn't care anything 
for the Xew York milkmen, whether it was Borden or somebody 
else; he had his choice and he was the boss the last four or five 
years." The farmer kept the milk home if he could make more 
from the cheese and butter factories. There has been a shortage 
here for at least eighteen months or two years, because there are 
a lot of dairies who cannot afford to ship their milk and meet the 
requirements of the board of health and the Agricultural De- 
partment. High price of feed and cows had a good deal to do 
with it — double of what they were six years ago. There is a 
scarcity of farm help and this causes the high price of milk. It 
costs to handle milk now 40 or 45 per cent, more than it did 
several years ago. The farmer is independent. They get sixteen 
cents for skim cheese to-day, worth about three cents. A quart of 
milk costs nine cents and it has more nourishment than five pounds 
of skim cheese. I am secretary of the Consolidated Milk Ex- 
change, but do not know how long I have been, but have been since 
the '' record book," offered in evidence, was begun. It contains 
minutes of the meetings of the board of directors of the Consoli- 
dated Milk Exchange from January 9, 1906, to the present time. 
I started with that book and know nothing about the records be- 
fore that time. I do not know who the former secretaries were. I 
don't remember any of the parties that kept the minutes. 

(The minute book was marked in evidence, under objection by 
Mr. Ely.) 

I think I. C. Jordan kept the minute book before I did, but he 
is dead. I have charge of this minute book, and it is the only 
one. I may have, but don't remember keeping the minutes be- 
fore those in this book. These are the present by-laws of the 
Consolidated Milk Exchange. 

(Copy received and marked Exhibit 6.) 



214 [Senate 

There have been no amendments that I know of. If there 
were any other minutes, they would probably be kept in Jersey 
City. The last meeting of the directors was held last Saturday 
in Jersey City. I don't know that there are any amendments to 
these by-laws — any amendments which show the minutes except 
the copy of by-laws produced. Minutes were often taken in pencil 
and copied in the record book later. I have none of the minutes 
-copied in pencil. I have no contracts or agreements of the corpo- 
ration in my possession. The minute book and the by-laws were 
given me when I became secretary — the list of stockholders and 
the stock certificate book, too. It is so long since I was elected, 
that I do not recall what other papers I got. The " books and 
papers are kept in a safe in Jersey City most of the time and 
the record book is carried back and forth from here to Jersey City. 
We have nothing at 6 Harrison street and the certificate book 
is in Jersey City. At the meetings of the Consolidated Milk Ex- 
change, we look after the general interests of our business — 
cans, lost property, etc., and also look after the general legisla- 
tion needed in our business. We had a legislative committee to 
look after the legislation. 

(Paragraph in the certificate of incorporation, as follows, " To 
promote uniformity and certainty in the customs and usages of 
the trade '' speaks for itself and the witness, the referee held, was 
not qualified to elucidate the meaning of that provision. Cer- 
tificate of incorporation is marked ^^Ex. 1, December 13, 1909.") 

We got permission to do business in this State for the Consoli- 
dated Milk Exchange for the primary purpose of being able to 
hold and convey real estate. It was not our purpose to promote 
uniformity and values in milk. Based on all the information 
we could get, the board expressed its judgTiient on the value of 
milk. In regard to the clause to promote uniformity in trade, we 
did no business — everybody was at liberty to buy cheaper or 
higher '' than the Exchange price." We never made a price on 
milk. It is immaterial to me what price was placed on it. I 
had to pay more or less, depending upon the supply and demand. 
We were always trying to get a better quality to satisfy the board 
of health, the Agricultural Department and the public. This was 
one of the main objects, and to talk over our mutual interests 



Xo. 45.] 215 

to get the railroads to open new milk routes. When several men 
applied, the railroads gave more consideration to the application. 

Q. Do you know the meaning of the word '* uniformity/' Mr. 
Laemmle? A. Well, I suppose if we have one bottle of milk, 
shake it up well and split it in half, and I give you half and I 
take the other half, we have uniformity in quality and uniform- 
ity in measure. 

The dealers tried to improve and get a uniform quality of milk. 
As to a uniform price, " The Exchange never made a price.'' 
It Avas not one of the objects of the Exchange to make the price 
uniform. While it might be a good thing, it was not one of the 
objects of the Exchange to procure a uniform price of milk in the 
country. There are a great variety of contracts in the country — 
some by the month, some for six months. 

(Objects of the corporation read in evidence.) 

What I mean by uniform quality and valuation is that, ^' if we 
could find the quality of milk to be of equal quality in butter fat 
and so on, and one standard could be had for that, then it would 
be an easy matter to bring about an equal quality of valuation." 
There are many qualities in the country — hardly two cows alike, 
but we have to pay the farmers their price. It would be a good 
thing to have the quality of milk uniform, ^' as a five cents car 
fare on the roads here." It is impossible to purchase milk re- 
quired for this city '' at an even price." Quality is so imeven 
— '^ differs so much like nickels and ten cent pieces." I mean 
to differentiate the word '^ valuation " from the word ^' price " 
in this way: It would be a good thing to have a uniform quality 
of milk in the county — it Avould result in a minimum of fines 
in Xew York. I mean it would be easier to form a valuation 
if the quality was equal — that is, an even quality for milk like 
yoTi have for flour or other articles of commerce. It would bo 
desirable to have a uniform price paid for milk of a uniform 
quality. Under such circumstances, it would be easier to get at 
the valuation of milk. I don't know why so much attention is 
given to valuation. 

The resolution is passed and I write it down — I confer with 
no one. I simply write down the resolution. I don't know that 
the values were sent to the " Milk Reporter." I don't send them. 



216 [Senate 

I sell very little bottle milk — about five dozen quarts, and 
about 100 or 110 cans — forty-quart caus — of dipped milk. I 
don't knOiW how the '^ Milk Reporter " got the values. The 
reporter of the '^ Milk Reporter '' gets the prices from any 
one he can and wherever he can. The ^' Milk Reporter " 
gives the price per quart, while the resoluition is '^ per 
40-quart can.'' It may figure out the same, but I don't know. 
The members do not consider the can price on any. basis, or quart 
price, because they all buy at difPerent prices. In some cases, the 
can price and the quart price are the same, but in other cases, 
the milk is bought on contracts or on butter fat or total solids, 
^' and there are a hundred different ways of buying milk and it 
may figure out differently." The editor of the '^ Milk Reporter " 
may make the price withont knowing the values fixed by the Ex- 
change, but I think he gets the information somewhere. The 
Milk Exchange passed a resolution as follows: ^^ We find the 
value of milk to be $1.41 per 40 quarts, less freight charges from 
each respective shipping station, together with an allowance of o^ 
per can for cartage." I do not know how often I have bought 
on Exchange price'. I don't think over three or foair times since 
I have been secretary. The editor of the " Milk Reporter " is 
John J. Stanton. He would ask me " How is the value ? " Mr. 
Campbell testified that dealers usiiially manufacture at a loss and 
that is true. ^^ When butter and cheese is high, I am sorry to 
say that milk men or shippers have none to manufacture. But it 
is just then when we sustain a loss, when the market is glutted 
and filled up, and we are fiush, then we are compelled to work 
off our surplus. But that is just the time the cheese and butter 
is low. That brings the surplus and then that is the reason there 
is a loss." I never received any postal card from the '' Milk 
Reporter." I don't know who gives out the prices to the " Milk 
Reporter." The directors called each other on the telephone and 
find out about what has happened and the papers call up and 
find out if there is a change. 'No word is sent out by the di- 
rectors. The practical value of the resolution on value is that the 
members can find out what it is by inquiring of each other. They 
get the information through the papers and " we cannot help it 
if the reporter finds out something." We passed a resolution to 



Xo. 45.] 217 

find out where we stand and we don't care whether the members 
know it or not. When I nsed the word ^^ we '' I mean the milk 
dealers in general. It does not matter whether the inquiry comes 
through a member or not. It was not the intention that the 
^' values we arrived at '' should be coramunicated to a stockholder. 
We did not intend to keep the information to ourselves. I don't 
know what we intended to do with it. After taking all. this trouble 
of passing resolutions, that was generally the end of it and the 
passing of resolutions once a month or less had no significance 
whatever. The members had to go out and pay what they could 
get the goods for. We had much other business to attend to 
besides passing on value. Our minutes show something about 
legislation and stolen cans. I never got a postal card like Ex- 
hibit ^' H," but I may have seen one not five times. There is no 
blackboard or blotter where the resolutions on values appeared. 
No one was especially authorized to give out the resolution on 
values, but might do it voluntarily. The resolution had no other 
purposes than to get the judgment, that is, the opinion of th.e 
majority of the directors of the value of milk that day. The di- 
rectors never talked about the price to the consumer, as far as I 
know. The meetings lasted from fifteen minutes to an hour and 
w^ere generally held in the afternoon. We held one meeting a 
month, sometimes two, and special meetings were called by order 
of the president or three directors. I sent out the notices. Some- 
times they were written and sometimes they were oral — some- 
times by telegraph. I never read the certificate of incorporation. 
I don't think I ever read the by-laws. I may have read some 
paragraphs. I occasionally had to. 

I paid different prices for milk during 1907, 1908 and 1909. 
I will try and furnish a list of them if I can find one. It costs 
me to handle milk at the creamery one-half cent a quart, freight 
charges about three-fourths of a cent from the three different 
freight zones, twenty-six cents, twenty-nine cents and thirty-two 
cents respectively ; cartage from the railroad to my place of busi- 
ness one-fourth cent in Manhattan and a little more to Brooklyn; 
and delivery to stores one-half cent ; this is for can or dip milk. 
Two cents covers evei^y item of expense in the handling of a quart 
of dip milk from the time I get it from the producer, until I de- 



218 [SiENATE 

liver it to the consumer, not including investment and bad collec- 
tions. '' Bad collections are heavy, expecially in the dip or can 
milk and on the two cents I have not made any allowance for bad 
debts.'' There is also a heavy loss on sour milk. I have no direct 
deliveries from the farmer. All is delivered to the stations in the 
country. I assume all the responsibility of delivery from the 
farmer to the consumer. Outside of the items mentioned, includ- 
ing ice, two cents covers entire cost from producer to consumer. 
Ice has been twice as expensive this year. In ordinary years, two 
cents would cover the cost. It is much more expensive to deliver 
bottle milk. I only deliver about five dozen bottles. Mine is a 
close corporation and has paid no dividends. I have drawn out 
only wages from the corporation — only about $'20 a week; my son, 
who is treasurer, drew $15, and no other member of my family 
draws out anything. One-quarter of a cent a quart might cover 
the loss through bad debts, sour milk, extra ice, my salary, depre- 
ciation and so forth. I Avas not present at the meeting of the 
board of the Consolidated Milk Exchange some time duriug the 
fall called to consider raising the price of milk to the consumer, 
and no such meeting was ever calle^d to my knowledge. The Con- 
solidated has nothing to do with that. ^N^either was there any 
meeting called to reduce the price. I heard talk among dealers 
wondering what they were going to do if the prices continued to 
go higher, but I was away in the country and did not know that 
the price had gone to nine cents. 

Q. 'Now, previous to November 1, 1909, you had considered 
the advisability of advancing the price of milk, had you not ? A. 
I always thought we were paying more than we got for it and I 
oifered my business for sale to quite a large number of men, and 
stated so in the open meetings, that I am ready to sell out at any 
time. I think I advanced the price of dip milk about November 
1st, not a cent a quart — I think I advanced dip milk about one- 
quarter of a cent. Dip milk is my principal business, but I sell a 
little to the consumer, and that I sold at nine cents after !N'ovem- 
ber 1st. I advanced it after my son came home and told me that 
different parties had advanced prices on E^ovember 1st and we 
simply followed that price. The retail price was not discussed 
by the board of directors. I was not interested in it. I dis- 



Iso. 45.] 219 

cussed with Mr. Beakes the market conditions, saying that we 
bad to i^ay much more for the milk in the country to get enough 
to supply the trade and that butter and cheese factories were 
paying so much more. We said, ^' What can we do ? " Our 
strongest competitor last year was the manufacturing market. 
This market was higher this vear than anv time since the war. 
The market conditions were discussed by dealers and they com- 
plained that they could not pay their bills. They had to put 
notes in the bank and borrow money and I think these matters 
were discussed with Mr. Beakes, on our way home from a meet- 
ing, not at a session of the directors ; talk among the dealers gen- 
erally w^ith reference to the advisability or necessity of advancing 
the price of milk was, I suppose, in reference to the retail market. 
I am in the wholesale business, just a shipper of milk. I never 
saw or heard of any written agreement among the dealers agree- 
ing to advance the price of milk about Xovember 1st. 

Q. 'Was not the general consensus of opinion that if Bordens 
were advancing the price of milk that all the other dealers w^ould 
do it ? A. I believe the small dealers would feel relieved if 
Borden would raise it, because Borden, with their very large 
capital, could hold out longer than an independent, poor dealer. 

Before Xovember, the dip milk in my stores was six cents and 
I raised it to seven cents about the 6th of Xovember, and bottle 
milk w^as raised one cent also. 

By-laws provide for several different committees and there may 
be a committee on values. I think that committee in 1909 was 
composed ef the w^hole board, seventeen in all, they were all there. 
'Nine made a quorum. If there was no more present, nine mem- 
bers might establish a value. I don't know whether any member 
of the board was ever authorized to 2:ive out the values fixed at 
the meetings. It was generally understood that any member 
might. I simply telegraphed my stations in the country that I 
would pay so much for milk from such a date until further notice. 
Sometimes we changed a price without a meeting, but usually 
right after a meeting. We used the Exchange valuation as a basis 
— sometimes paid more and sometimes less. The loss through 
sour milk falls on the dealer. 

I did not discuss the advance of the price of milk with Mr. 
Beakes. I was up the State in one of my creameries for three or 



220 [^Senate 

four days at that time. It was not discussed for weeks prior to 
J^ovember 1st, as far as I know, except that dealers talked over 
the higk cost due to high prices in the county at cheese factories, 
etc. INothing was said about the retail price. I said I was losing 
money on both bottle and dip milk and I didn't propose to do 
anything about rendering my business more profitable except to 
get as much for my milk as anybody else. The time I spoke to 
Mr. Beakes was when milk got short in September. What I said 
to him was, ^^ How are we going to get milk and keep it, with 
the strong competition of the manufacturing market," and he said, 
" I don't know." 

I saw Mr. Gorman in the aldermanic chambers at a hearing, 
I think in April, 1909. I had not known him before that time. 
He introduced himself to me. He said he would come in the 
morning to see me. Two days afterward I saw him at my office. 
He proposed an ^advertising scheme. " He talked at length against 
the idea of ^Nathan Strauss pasteurizing, that he is simply stuck 
on his pasteurization and he wants to sell plants, and he proposed 
through sensible educational articles, in the paper he represented, 
which was the ^^ Tribune," that he would show up to him and some 
other of the members that it is not necessary to have good, sound, 
fresh milk pasteurized, if this milk is properly taken care of." 
^' When I saw his bill of expense, I simply dropped." I said, 
^' There is not as much money amongst the milkmen." He was 
down at the Exchange, but not at a meeting. There were six or 
seven members of the board who met Mr. Gorman in the rooms 
of the Exchange and I was one of them. He proposed the same 
scheme to them. He said the reason milk was selling so poorly 
was on account of the tuberculosis exhibition at the Museum of 
l^atural History. I wanted to show the whole matter up — I 
dropped it at that time. Mr. Gorman wanted for his educational 
article $5,000. 

Exhibit 3 is a list of dealers, and I put down a few names and 
told him to get them first, saying if they aren't willing, I cannot 
afford to pay it. There is some of my handwriting on Exhibit 3. 
I was willing to pay my share to teach the j)ublic what milk is. 
^^ They don't know to-day what milk is." Such a campaign of 
education would bring about larger sales of milk. I don't lose 



IS^o. 45.] 221 

money on the sale of milk all the year round. Xothing was said 
about educating the public to the advanced price for milk. 

By resolution, milk dealers outside of the Exchange were often 
given the privilege to come in. They were never refused. The 
meetings were not secret. Such was the general custom. I saw 
Exhibit !N"o. 1 in the ^^ World " and I think Mr. Gorman begged 
to get my signature on it, stating that if I signed, others would 
follow, and I rejected it because I didn't like his idea; it was 
simply working a scheme to make money. Exhibit ^o. 4 is the 
names of the stockholders and a ballot for the annual election for 
January, 1909. I believe it is correct. I never saw Exhibit ]^o. 
2 before. Mr. Gorman is in error when he says the campaign 
was wanted to raise prices. The price was advanced in 1907. I 
think the raise was in November, 1907. I was selling milk at 
eight cents at that time and didn't advance it. The first time I 
advanced milk was on i^Tovember 1, 1909, to nilie cents a quart. 
At the same time, I advanced dip milk. I don't think I advanced 
dip milk in 1907. 

The Distributors' Realty Company is a real estate company. 
It bought all its holdings of real estate from the Consolidated 
Milk Exchange, and the stock of the Consolidated Milk Exchange 
reduced $2 per share. I think this is about one and one-half 
years ago. I have been a stockholder and director of the Dis- 
tributors' Realty Company since its incorporation and treasurer 
only lately, and I am also secretary and have the books, all of 
which are in ^ew York. I can produce them and I certainly 
will at the next meeting. 

The Mutual Aid Society is five or six years old. The Con- 
solidated Milk Exchange has $1,500 in cash but nothing else ex- 
cept a few dollars that may have come in from collection of dues. 
The man who owns the cans pays for their collection. 

I am a stockholder and director of the Dairymen's Manufac- 
turing Company, but am not an officer. It was organized to 
manufacture cans, tinware and milkmen's supplies, under the 
laws of the State of l^ew York. IN'ot all Exchange members are 
members of it. The majority might be. 

(Certificate of incorporation of the Dairymen's Manufacturing 
Company received in evidence and marked Exhibit 7 and copied 
in the record.) 



2'22 - [Sejs-ate 

I know Mr. Beales among the incorporators. He is not a mem- 
ber of the Exchange. I don't remember if the incorporators were 
milk dealers or if they are stockholders at present. 

(Certificate of payment of one-half of the capital stock of the 
Dairymen's Manufacturing Company received in evidence, and 
marked Exhibit 8.) 

Of the incorporators I think Mr. Beakes and several other 
members are members of the Consolidated Milk Exchange. 

I went to the meeting of the board of alderman^ where I saw 
Mr. Gorman, because I wanted to go to any place where there is 
anything to be learned in the milk business. Mr. Beakes stated 
that a campaign of education should have been started long ago, 
but did not make that statement at a meeting of the Consolidated 
Milk Exchange. It was an occasion where Gorman got a few 
friends together — men of the milk business. In one of the 
rooms where the Consolidated Milk Exchange held meetings, 
Mr. Beakes did make that statement, saying that the public ought 
to have been enlightened about milk and about fairness and the 
quality of milk long before this. He didn't say that if the public 
had been enlightened they could advance the price of milk. 'No 
statement about advancing the price of milk was made at that 
time. The papers had said so much about contagious diseases 
and germs in milk that the sales dropped oif. Gorman said he 
was the man to bring about " the natural sale again, for a com- 
pensation." I don't think I had anything to say to Mr. Gorman 
except about the subject of his inquiry. The questions that arise 
about cans, etc., come up sometimes before and sometimes after 
meetings. The small details are not always mentioned in the 
minute book. I don't remember anything was said about Bor- 
den s joining in the campaign of education-. With reference to 
the raising of the price about I^ovember first, *^' I believe it was an 
unavoidable condition." " I believe it could not be done other- 
wise, unless the men in business would work at a loss. That is 
my honest conviction. It could not be avoided." Prices paid at 
the present time are higher than for some years back. The milk 
dealers must run short for two or three months in paying their 
bills. The Borden price and the Milk Exchange price were 
higher in 1908 than in 1909, but that Avas an exceptionally dry 



:N'o. 45.] 223 

year. Had to get milk from a great distance. The majority of 
dealers own creameries or stations in the country. Most ship- 
ments are by rail. There are freight zones fixed by the Interstate 
Commerce Commission, as follows: Forty miles, twenty-three 
cents on a forty-quart can. The next is twenty-six for sixty miles 
and thirty-two cents for all over, and there is a percentage off for 
carload lots. A little milk goes by boat. Eight freight rates 
mentioned in the September number of the '^ Milk Reporter " 
may be correct, except as to the carload lots. 

(''Milk Reporter '^ marked Exhibit 9.) 

It is difficult to determine who would get the benefit of any 
advantage in freight rate by reason of a cheaper water rate. It 
is always a matter of contract. The rates on bottle milk are 
ahvays higher. The freight rate on bottle milk is from a fraction 
under to a fraction over a cent per quart. The railroads get their 
cash from freight on the platform and whoever takes it away pays 
for it. I think J. E. Wells, Thomas B. Habison. C. H. C. Beakes, 
William C. A. Witt were members of the Milk Exchange, Limited. 
J don't know which of the Sanfords. J. V. Jordan, I think, was 
a member of the Exchange, Limited, and also I. C. Jordan. I 
don't remember about Fred H. Beach ; George Slaughter was a 
member of the Limited, also Mr. William A. Wright. I don't 
know where the records are of the Milk Exchange, Limited, or who 
preceded me as secretary, and I don't think the records are avail- 
able now. I don't think there ever was a Committee on Sales and 
Price in the Consolidated Milk Exchange. AVe never made any 
sales. " The resolution in my handwriting referred to the Price 
and Sales Committee " may be a mistake in my writing. We had 
no Price and Sales Committee. '^ It was simply a committee to 
.cet information and to express their opinion according to the 
su])ply and demand on the value of goods." I think that com- 
mittee was the w^hole board. I cannot remember who was on the 
l^rice and Sales Coijimittee referred to in the minutes of February 
27, 1907. I think that statement of Price and Sales Committee 
was a mistake in my writing. There never w^as a Price and Sales 
Committee. This mistake might have been made by me several 
times. I do not recollect that we wanted the names of the com- 
mittee not to appear. In each case where the Price and Sales 



224 [SiEKATE 

Committee is referred to, it may have been a mistake, m.ade by 
me in referring to the committee as a '^ Price and Sales Com- 
mittee.'^ I do not think that there is any resolution passed at an 
annual meeting appointing such a committee. If I have recorded 
anything of the business of such a committee it is a mistake, and 
if there was such a committee it was without my knowledge. 
This was a committee on values to express their best judgment as 
to the value of milk, and I don't know why it was so called. If 
the Executive Committee did any business, I don't know anything 
about any records having been kept of it. Whatever reports they 
made were made verbally. I don't know that any records were 
kept of the January 31, 1906, and the January 13, 1908, meetings 
of the Executive Committee. I never was a member of such a 
committee. I cannot offer any explanation if it appears that all 
of the committees are named except the Committee on Values. 
I never got any instructions to insert the names of the Price 
and Sales Committee in the minutes. I cannot give any 
explanation that their names are not there. The Legislative Com- 
mittee looked after the legislation at Albany. We wanted no 
change in the law as it now stands with reference to the legis- 
lation of the case, that is,, the cases of lost cans should be tried in 
the county in which the owner resides. The expenses of the com- 
mittee was secured by collection and the collection was obtained 
from large dealers without regard to membership in the exchange. 
1 don't remember that I was secretary before January 9, 190'6, 
and no separate book was kept in the Jersey ofEce. I kept no 
books at home. I kept the minutes on a piece of paper, then 
copied them in the book. Any minutes that there may be, might 
he in Jersey, and we had the privilege of putting such things in 
the Dairymen's Manufacturing Company's safe. They may be 
there now. I have no personal objections to looking, and will, 
with the consent of counsel. If I were being advised by counsel 
to the contrary, I would not produce them. I don't know of any 
other minute book than the one in evidence. The paper torn from 
the inside of the cover on the minute book in evidence was a form 
used for calling meetings and proxy. I guess it is true that about 
eighteen meetings were called during the last three or four years, 
especially when the Board was called to consider the value of milk. 



]STo. 45.] 225 

Any time sometliing important came up and we could not afford 
to wait for meeting, we called a special meeting. I called these 
meetings because the president ordered me to. 

Q. Well, now, why did you deem it necessary to call a special 
meeting of the directors to consider the value of milk or to request 
it? A. Well, sometimes in my own judgment I found the goods 
which were handled were very scarce, supply and demand and 
manufacturing market being very high, and we were losing dairies 
and the market was very short here, and consequently I felt that 
an expression as to our judgment would elevate the value of the 
goods so the goods would come in this market. 

Q. Well, how would that bring goods to this market ? A. If a 
higher value would be found, in my judgment goods would come 
forward. An expression of opinion by the Board would have an 
effect upon those who decided to follow it. The majority of deal- 
ers do not necessarily follow the market or valuation expressed by 
the exchange. If a higher price was placed on milk, it would 
encourage the farmers to ship their milk instead of making it into 
butter and cheese. The farmers send it where they get the most 
money. 

Q. Well, then, if he didn't hoipe to get the Exchange price, 
how w^ould it encourage him (the farmer) to send his milk to 
ISTew York? A. The value found by the Consolidated Exchansre 
had no bearing on the general market. 

Q. (repeated). Well, then, if he didn't hope to get the Ex- 
change price, how would it encourage him to seond his milk to 
N^ew York ? A. For certain reasons, there are other prices pre- 
vailing which might be higher or lower, other milk buyers. If 
the farmer would find the value of the Exchange higher than 
any other milk buyei', he would naturally seilect the price found 
by the Board of Directors, that is, the value. 

I said that the raising of the price by the Board of Directors 
of the Exchange would encourage farmers to send milk to ISTew 
York, providing there would be nobody paying higher prices. 
Milk held under contract I don't think would be affected by the 
Exchange value. I do not recall that the raising of the value 
by the Consolidated Milk Exchange over influenced the farmers 
to send milk to !N'ew York. Contracts made with the farmers 
8 



226 [SlENATE 

based upon Exchange prices would be affected by raising or 
lowerinig the valuation by the Board, generally. If the Eixchange 
here lowers or raises the price, then the deale^r under hisi con- 
tract lowers or raises the; amount that he pays the farmer for 
milk. I know that miany special meetings were called — some to 
consider the value of milk and for other purpo'ses.. I eannot 
recall all the reasons now. I don't know how the resolution of 
the Board would affect the supply and demand. The only things 
done at the meeting held on the 22d of I^^ovember, 1909, in 
Jersey City was to investigate the matter of a number of stray 
cans and passing of a resolution revoking our license to do busi- 
ness in the State of ^'Neiw York. I always selected the particular 
form of expression for describing the action of the Board when 
it passed upon the value of milk and the insertion of thei word 
'^ price " in the place of '' value '^ on certain occasionBi was my 
mistake, and no one. ever instructed me as to the particular form 
of the resolution. I w^as never told thati it would be illegal to 
use the word ^' price.'' I didn't use the word " price " because 
" we never corisidered that we make any price for' anything. We 
just express the value of the goods." 

I rem^ember the communication of ■September 26, 190i6, in ref- 
erence to the: Pomona Grange and the minutes of September 26, 
1906, that was about the admission of members of the grange 
to the Consolidated Milk Exchange. It is customary at the first 
meeting every year to make the Committee on YaluciS consist of 
the full board. I don't think that the Committee on Amend- 
ments to by-laws ever did anything. The committee provided for 
in the minutes of May 29, 1907, was a coimmitteo to change a 
mortgage, I believe. That is all the committee did. On the 
matter of appointment of these committees, anything I say is 
only a matter of memory. To' my knowledge, the Rules and 
Regulations Committee did nothing. We did have an ad in the 
^' Milk Reporter," and we did insert a resolution on the death 
of a member. The Consolidated Milk Exchangei never o^wned a 
safe since I was secretary. There are none of the books in the 
safe of the Creamery Mutual Aid Society. I at one time was 
ordered to get someone to open the safe. 

I was present at 6 Harrison street when Mr. Gormian was 
there and a number of the directors, but I don't remember that 



'No. 45.] 227 

proof of articles were to l>e snbiiiitte.d to a committee for ap- 
proval. ]\lr. Gorman stated he would not start printing anything 
nntil he had the money matter fixed, but copy was to be sub- 
mitted for approval, but I do not think any particular person 
was to appio^'e the: copy. I ha^-e no recolleiction of ever having 
made the remark '^ that we had paid more than three times this 
amount, namely $5,000, on things that we have gotten no bene- 
fit from." I said to Gorman after he had explained his propo- 
sition, " You cau see the men and see whether you succeed. I 
doubt it very much." And that is all I said to him. I was 
reasonably sure that he could not succeed. I have no recollection 
of sho^^dng him the paper. He showed me a lot of ne\vspaper 
cli.p])ings, etc., showing what he had done with the beef for the 
butcher <5 aud for the brewers a few years ago — there were 
cej'tain articles agaiust beer and against meat, and he fi:xed them 
all up, and he got them all straightened out, and he could do 
wonders for us. I don't remeinber, but I might have said it in 
a joke, ^* Some of those fellows will talk like a lot of smart 
Yankees, but the way to do it is to get their names down." Fre- 
quently, ^^'hen there is a deficit a few have to make it up. " I 
said that I would be willing to pay my share " to enlighten the 
public about the nourishing quality of milk which nine out of 
ten don't know. T think Mr. Gorman showed me a list of dealers 
with letters after the names, and I think I stated that that was 
all right. I have an arrangement with Mr. R. B. Baker, and 
he orders milk from me, and I ship it to him. The first of the 
season I sold him over the Exchange, and now I get a little 
above Exchang-e, because it is hard to get milk. I have nothing 
except a A^erbal contract with him, — only an understanding. 
Under my understanding with him, the price does not depend 
upon the Exchange price. " Sometimes when milk is flush, he 
gets the best of me, and when milk is short, I get the best of 
him." We had a fixed price for April, another for May and 
another for June, and at the present time he pays me ten cents 
above general market. That is the value found by the Exchange. 



228 [Seis-ate 

Copy of Foem of Resoi-ution Usually Passed by the Direc- 
tors OF the Exchats^ge Wheist Passing Upon^ the Value 
of jVIilic. 

Hesolntion passed March 13, 1906. We find the value of milk 
to be $1.41 per forty quarts, less freight charges from each re^- 
spcctive shipping point together with an allowance of five cents 
per can for cartage. 

William A. Lawrence : 

I reside at Chester, ^NT. Y., and am engaged in the milk busi- 
ness under the name of Lawrence & Son, and I am the owner. I 
produce milk and own two farms. I manufacture cheese from 
my own milk, as well as from milk that I buy. I think I was 
a member of the old Milk Exchange, Limited. I am a stock- 
holder of this Consolidated Milk Exchange. I have never been 
an ofiicer or director. I think I have been present once or twice 
at meetings of the board of directors of the Consolidated Milk 
Exchange. I bought my stock several years ago, and have been 
a member since its organization in 1895. I have 15 shares I 
think. I derive some benefit from owning stock in the exchange 
in that I made use of the valuations arrived at by the board of 
directors of the Consolidated Milk Exchange in reference to the 
milk.. I bought my milk based on the prices of the milk ex- 
change. The I*^ew York price was known as the milk exchange 
price. I am informed of the valuation arrived at by the board 
of directors of the Consolidated Milk Exchange, through my 
patrons, different newspapers, and the ^^ Milk Reporter." I 
think I also got post cards from the " Milk Reporter." I m.ay have 
got information over the 'phone as to the price arrived at by the 
directors ; I don't remember. I never knew of any agreement as 
to price, because my understanding was that they made no price. 
They simply said, " We find the milk is worth so much now until 
further notice." I never heard of any agreement among the 
members of the exchange to stand by the valuations fixed by the 
board of directors to the extent of buying and selling milk only at 
that valuation. I only heard rumors from outside people talking 
about it, but never considered myself bound to buy at any of the 
prices they should establish. I saw by the paper that the retail 
price of the bottle milk to the consumer in Xew York city was 



Xo. 45.] 229 

raised by the majority of milk dealers about November first from 
eight cents t-o nine cents a quart. I think there is a flush of milk 
in my locality at the present time, either due to overproduction or 
lack of consumption in the city. In my opinion, an overproduc- 
tion or surplus, such as exists at the present time, would tend to 
cheapen the price. My explanation of why the price does not 
come down now is: If the price of my goods falls off, instead of 
manufacturing it into something else, I don't go to work and re- 
duce my price right away, because I am after the revenue ; I keep 
that up and take my loss at the other end of it, same as a man has 
a lot of milk, he puts out fifty cans a day and he is three or four 
cans over, he better dump that into the gutter. They better take 
the profits as they can get it and do something with the other; 
throw the balance away. When there is a surplus, the milkmen 
and dealers hold the surplus in their country stations and only 
ship what the market will take. They ice up the cream and 
hold it. I have held it myself for a month. I have kept milk for 
a week, but think it could be kept for 10 days. I have iced 300 
or 400 cans and held it over for a month and then shipped it off 
to take care of the hot weather trade. It was shipped to ]^ew 
York. I do not know whether it was for the breakfast table or 
for. ice cream. I have heard of cream being separated from the 
milk; that is, enough cream taken out so that the milk would just 
contain enough butter fat to be within the law, but I have never 
known of it being done. The DeLeval Separator can be regu- 
lated so as to take off the excess cream and leave 3 per cent, butter 
fat. I have no figures to state the cost of production of milk. In 
the flush season, when milk is cheap, the cream may be held a 
month later and then sold at a higher price. This custom pre- 
vails. I keep track of the exchange prices. I give my customers 
the option of selling me either at the exchange price or Borden's 
price. In my opinion, Borden and the exchange prices are prac- 
tically the only two prices the farmer can choose between in our 
part of the country. Borden's people are buying about forty 
cans a day and I am buying a little over 300, so you can draw 
your own conclusions as to whether the farmers prefer exchange 
or Borden's prices. 



230 [Senate 

Samuel Levy: 

My business is at 45 Forsytli street. I am in the milk busi- 
ness and have been in that business since 188 8. I incorporated 
mj business about six months ago. It is now the Levy Dairy 
Company. I am president. The capital stock is $50,000. I 
■own about $40,000 capital stock. I own some creameries and 
rent some. I own creameries at Middleville, Citterville and Ver- 
non, 'New York. I operate creameries at Canastota, Oneida 
Castle, Clarkville, Seths Corners, I^ew York. Eyra, Truxton, 
Clayton, Winthrop, North Lawrence, East Steuben. I sell milk 
only in New York city. I am a wholesaler. I own two or three 
shares of the Consolidated Milk Exchange. I have never been an 
officer or director of the exchange. I do not own stock in Bor- 
den's Condensed Milk Company, Sheffield-Farms-Slosson-Decker 
Company or the Mutual Milk and Cream Company. I never at- 
tended ■ any meetings of the Consolidated Milk Exchange. By 
reading milk reports I found out the value of milk established by 
the board of directors of the Consolidated Milk Exchange. I know 
how to buy and how to pay up the farmers. I don't know who makes 
the price! exactly in the '^ Milk Reporter,'' but I know we get the 
" Milk Reporter " and we see the prices and then we think — 
and then I find out what some other people pays, and I make* the 
prices that way. In sl good many places you have got to pay on 
Borden's prices or more or less. Sometimes we make agreements 
with farmers to pay them exchange prices. Sometimes Borden's 
prices. I think it cost me to handle milk from thirty to thirty- 
five cents a can not including freight. I manufacture some milk 
into butter and cheese. I do not sell any bottled milk. I think 
I raised the price of milk about ten cents a can on November 1st. 
All of my stations and freight zones are thirty-two cents. Milk 
is shipped by rail. I am a member of the Milk Dealers Protec- 
tive Association. I have never been an officer. I think the 
Standard Dairy belongs there, and Mr. Beakes belongs there. 
Mr. Vedderham is the secretary. I pay dues of this assoeiation 
to George W. Blefford, can collector. We are taxed so much for 
cans which every member pays in proportion to the amount of 
business he does. I do not know of Blefford coming around in 
the dead wagon or of his trying to force Lieberman or Miller to 



;N'o. 45.] 231 

join the association. I bring about 1,200 forty-quart cans of 
milk to 'New York city per day on an average. If anybody goes 
to my customers and offers to sell them milk ten cents cheaper, I 
go and sell them for so much less Igive him milk, or anybody can 
do that. The collecting of cans takes up Blefford's time in fact 
two more collecting wagons would have plenty of work for two or 
three weeks. Bleffbrd is not a wholesale milk dealer. I pur- 
chase from two to three thousand milk cans per year. They cost 
about $2.40 or $.2.50 and in addition to this I buy two to three 
thousand extra covers, covers costing forty cents each. In mak- 
ing an agreement with the producers for the sale of milk with me 
I would say to the farmer I got to pay what the neighbors pay ; in 
some places we have got to pay Borden's prices, if Borden is near 
by, we have got to pay his prices, and the rest of the places we 
have got to jyaj what the neighbors pay. I post up the prices I 
will pay the farmers for milk in my different creameries. I do 
not have a written contract with the farmers. INTot all creameries 
are owned by farmers. Some of them are owned by railroads, 
that is the railroads build the stations. The stations are leased 
to individuals. This is to stimulate their shipping business. I 
have some stations that I lease from the IN'ew York Central and 
the Lehigh Yalley Railroads. The lease is just a plain one. I 
rent the factory and pay the rent. There is nothing in the lease 
providing for the freight rate. It is just thirty-two cents. It is 
a common practice by railroad companies. Half of the farmers 
that I do business with base the price upon the exchange. When 
the exchange valuation here in New York advances, I pay the 
farmer more, etc. 

Exhibit 4-C. received in evidence showing such of his prices 
which were paid during the years of 1908 and 1909, is as follows: 

Little Falls, N. Y 

East Steuben 

Tioga Centre 

Cedarville 

Oneida Castle 

Chittenango Station 

Elagtown, N". J 



1908. 


1909. 


$1,194 


$1,216 


1.14 


1.177 


1.158 


1.199. 


1.151/4 


1.217 


1.153 


1.171/2 


1.124 


1.186 


1.183A 





232 



[Senate 



1908. 1909. 

Ira Station, ISL Y $1,123 $1,179' 

McAdams St , 1.134 1.200 

Millers Mills 1. 146 1 . 207 

Sheds Corners 1 . 15 1 . 17 

Triixton . . ., 1.144 

Vernon 1.145 1.196 

Canastota 1 . 121 1 . 20 

Clockville 1.133 I.I614 

Middleville 1 . 204 1 . 201 

Lecla, eight months 1.077 8' months 1.394 

South Bay, eleven months 1 . 169 

Winthron ., 1 . 242 

Marshville, six months , . ., 1.34 

Fort Lawrence, five months. .: 1.40% 

My son-in-law, William Levy represented my corporation at 
the meetings of the protective association. 

Isaac MAGOoisr: 

I reside in Addison, Steuben county and am; engaged in the 
shoe business. My farm is located near Addison and is about 
one hundred and forty-one acres. The figures that I make my 
statements from were obtained from Mr. Danningberg, whose 
farm is near mine and who keeps fifteen cows and sells his milk 
to the Howell Condensed Milk & Cream Company. The figures 
show that there were 38,950 quarts of milk produced on this farm 
during 1908, which cost $l,2'2i0.83. The items going to make up 
the cost of production are : Interest on capital invested, the cost 
of labor and caring for the dairy, handling the milk and the 
feed. This was a winter dairy. It cost a small fraction over 
three cents to produce a quart of milk throughout the year 1908. 
I would consider one-half cent a quart a fair profit. I do not 
know whether this milk was sold at the exchange price during 
that year, but most of the years it has been. I have understood 
that the committee of the 'New York Milk Exchange was com- 
posed of some men in I^ew York who met when they thought 
there was too much milk coming and lowered the price and il 
they wanted more milk, they raised the price a little and coaxed 



JS^o. 45.] 233 

out a little more. This is my impression of tlie Consolidated 
Milk Exchange before this inquiry began. I have known of this 
exchange price and of the manner of fixing it for years — sold 
milk at that station for ten or twelve years and the majority 
of the farmers sell their milk at this station also. Some became 
dissatisfied and now sell their milk to butter and cheese factories. 
With the exception, as I have said, of the Cuba cheese price, all 
milk sold as fluid milk going to l^ew York is sold at exchange 
prices to the Howell Condensed Milk Company. The farmer 
was compelled to take the exchange price if he wanted to sell his 
milk. He had no option. The only other way he can do is to 
ship his cream to a butter factory in Pennsylvania or to some 
cheese factory. There is no way to market the fluid milk. I 
would state, that in my opinion, the farmer is absolutely bound to 
take the exchange price, no matter what price they establish. For 
several years, they have not asked us to sign contracts. I wish 
to state in regard to the exchange price, that we got for our milk 
when it was sold less twenty cents a can for handling the milk, 
station price at the freight is usually six cents a can, ferriage 
charges from Jersey City to IN^ew York. The farmers received 
exchange price less this ferriage. They gave us to understand 
that the ferriage includes the cost of trucking the milk from the 
platform to the store in the city, of the dealer who was to sell 
it. 

Heferee : 

Q. Then it was six cents for freightage ? A. Yes, sir. 

Q. Or cartage? A. Yes, sir. 

We took the paper that gave the exchange prices. As I re- 
member, the old contract was that we were to deliver milk in 
such a degree of temperature, cooled down to such a degree, and 
furnish them all the milk that was produced, except for the family 
use, on the farm during the year, at exchange prices. I have 
some figures that show the prices obtained at this creamery for 
milk, during the various months of the years 1907, 1908 and 
1909. Commencing January, 1907, price obtained was $1.35 per 
forty-quart can. February, $1.25; March, $1.10; April, $1.10; 
May 1st to 15ith, $1; May 15th to balance of month, 90 cents; 



234 ['Senate 

June, 80 cents; July 1st to IStla, 80 cents; balance of month, 
97 cents; August 1st to lltli, $1; August lltli to 21st, $1.10; 
August 21st to August 31st, $1.2i0; September, $1.20; October, 
$1,441/2; :November, $1,441/2; December, $1,441/2. 1908, Janu- 
ary, $1.40; February, $1.30; March, $1.20; April, 1st to 16th, 
$1.06; April 16th to end of month, $1; May 1st to 16th, 90 
cents; balance of month, 80 cents; June 1st to 5th, 80' cents; 
balance of month, 70 cents ; July, 80 cents ; August, $1 ; Se^p- 
tember, $1.05; October, $1.30; ]N"ovember, $1.35; December, 
$1.40. 1909, January, $1.35; February, $1.25; March, $1.20; 
April, $1.0'5; May, 85 cents; June, 70 cents; July, 93 cents; 
August, $1,12; September, $1,271/2; October, $1.35; November 
1st to 25th, $1.45; balance of month, $1.50; December, $1.50. 
That is the actual prioei I received in money for those three years. 
I understand that a combination exists, among the dealers in "New 
York city, composed of a few members that met regularly to make 
this price, and that is the price that farmeirs in my locality had 
to accept. They have no other remedy except selling to cheese 
factories, as I have before stated. I think the exchange is very 
detrimental, as they only pay a large enough price to keep it 
from going into the butter and cheese factories. The exchange 
makes the price so lov7 it is unprofitable for the farmers to sell 
their milk to them and they obtain so much milk that they can 
keep a surplus and they can limit the price for that reason. They 
get milk from a very extensive territory, even farther west than I 
am, and I am 301 miles west of !N'ew York. There is 127 acres 
in my farm, worth about $35 an acre, and fifteen cows, at about 
$50 a head. We are not guided by Borden's prices in my com- 
munity. Their nearest plant is at Wellsboro, Pennsylvania. The 
cheese factory that I spoke of is run on the basis of the cheese 
market. They charge the farmer so much for making the cheese, 
that is the way the cheese business is run; they don't pay the 
money right down. They manufacture the milk into cheese and 
then sell the cheese and give the farmer the benefit of whatever 
price they can get. The farmers are inclined to think it is a little 
more profitable for the last year or two in the summer season. 
This cheese factory is run during the summer only. 



Xo. 45.] 235 

Edgar L. Marsten : 

I reside at 23 East Fiftj-seventh street, 'N&w York citj. I 
have been a director of the Borden's Condensed Milk Company 
since 1902. I have never been a officer. I attended directors' 
meetings held in the company's office. I am a member of the 
firm of Blair & Company. I had no conversation about the 
necessity of raising the price of milk (bottled) previous to No- 
vember first. I have nothing to do with the milk business, simply 
attended the meetings. I think I know Mr. W. B. Conklin of 
the Consolidated Milk Exchange. The executive committee so 
far as I know raised the price of milk without consulting the 
board of directors, the only reason being given, Mr. Kogers said, 
was the fact that he had figured out that the delivery of each 
bottle of milk in ISTew York meant a loss to the company. He 
figured its cost of eight and eighteen one thousandths cents per 
bottle. That was for the month of October and each succeeding 
month would mean an increased loss. 

Albert J. Milbai^k: 

I am a director of Borden's Condensed Milk Company. Have 
been about fourteen or fifteen years. I was formerly the treas- 
urer. I think it was 1889 until 1903. I reside at 42 West 
Thirty-eighth street. I don't take any active interest in the man- 
agement of Borden's Condensed Milk Company. Merely attend 
the meetings of the board of directors. The only discussion I 
heard prior to E'ovember 1, 1909, in reference to the necessity or 
advisability of raising the price of bottled milk was from the fact 
of the high price the milk was costing us it would be necessary 
to do it. These talks were had in the company's meetings. Said 
it would be inevitable. That's all the general talk. I never 
talked with any one in reference to the advisability of raising the 
price outside of those meetings, l^ever heard of any agreement 
existing among members of the different companies in reference 
to it. The board of directors don't take any part in fixing the 
price of milk paid to producers. I have no recollection of any 
discussion in reference to a campaign of education to educate 
the people to pay a higher price for milk. I don't know any 



236 [Sein-ate 

officers or directors of the Sheffield Farms Slawson-Decker Com- 
pany. I have quite a number of shares in Borden's. I don't 
know of anything else that I could add to my testimony. 

DuNLEVY Milbaistk: 

I reside at Greenwich, Connecticut. I am a director of the 
Borden's Condensed Milk Company. I have been, since the an- 
nual election in l'9i02. I attended the directors'' meetings^ re:gu- 
larly. I attended one during October, 190i9. I understood at 
that meeting that the price of milk would have to be raised. I 
do not remember the discussion at the meeting. I know that the 
price of milk at the creamery end had gone up so there was not 
very muich profit in it and the price of delivery in 'N&w York was 
about eight and a fifth cents. I never had a discussion with 
anyone previous to November 1, 1909, in reference to the neces- 
sity or advisability of raising the price of bottled milk to the 
consumer. I take no part in the management or operation of the 
Borden Company. I know Mr. Millet of the Mutual Company 
and I think I have met Webb Harrison of the Consolidated Milk 
Exchange but I have not seen him since 1900. I never spoke 
to any of the men mentioned in the list of the consolidated in 
reference to the price of milk. I never heard of any agreement 
among the milk dealers in 'New York city to raise the price of 
milk on November 1, 1909, from eight to nine cents. 

Arthur W. Milburjst: 

I reside at Haverstraw. I am assistant treasurer of Borden's 
Condensed Milk Company. " In accordance with the direction of 
the Deputy Attorney-General that Mr. Milburn, Assistant Treas- 
nrer of Borden's Condensed Milk Company should criticise and 
discuss the testimony given by Mr. Scudder covering the accounts 
of the Borden company, the following is respectfully submitted. 

While the clerical accuracy of Mr. Scudder' s figures is not dis- 
puted the inferences and deductions apparently to be derived 
therefrom are erroneous and manifestly unjust to the Borden 
company. 

First. The business of the Borden company is divided into 
two separate and distinct branches, viz., the Manufacturing de^- 
partment and the Boute (or so-called ^^ Fluid Milk") depart- 



]S^o. 4'5.] 237 

ment. The former covers our trade in the luanufactured pro- 
ducts, of condensed milk, evaporated milk, condciiised coffee 
malted milk, milk chocolate and caramels. We have thirty-ona 
plants devoted to this branch of our business in eight different 
states and our said manufactured products are sold in every part 
of the United States and practically all over the world. The ac- 
counts of the two departments are kept separate and the accounts 
of the Route department cover, and always have covered, the 
entire business of that department with differentiation in final 
results either as to territory or product. 

As to territory the business of the Route department covers not 
only the cities of Chicago and 'New York but a large territory 
in New Jersey, a considerable portion of Westchester county out- 
side of New York and several adjoining towns in Connecticut; 
and in the country districts the cost of delivery is considerably 
less, and the profits correspondingly greater, than in the city dis- 
tricts. As to products the Route department covers not only fluid 
milk and cream but buttermilk and the manufactured products 
of casein, cheese, butter and unsweetened condensed milk sold to 
consumers from our wagons. 

Second. The accounts of the Route department cover, as 
stated, the business of the department, as an entirety and it is 
absolutely impossible to accurately determine from the company's 
books what proportion of the total Route department profits is the 
result of the purely fluid milk business in i^ew York city alona 
The method used by Mr. Scudder in determining such profit was 
to credit the fluid milk sold in !N'ew York with such a percentage 
of the total Route department profits (from all sources and de- 
rived from the entire enormous territory covered) as the total 
milk bottled in the East bears to the total milk used by the Route 
department in the East. This is a pure approximation, and as 
determining the profit on fluid milk sold in ^ew York city, is 
unfair as it assumes that the margin of profit on each 100 pounds 
of milk used is the same no matter what disposition is made of 
it and as it wholly fails to take into consideration the various 
other items bearing on the Route department business; such as, 
for instance, the greater cost of delivery in ^ew York, the greater 
cost of stabling, taxes, interest on the cost of expensive city sta- 
tions and the like. 



238 [Seis-ate 

TJiird. In none of Mr. Scudder's figures as to profits lias any 
allowance been made for interest on cost of investment in bottling 
plans and stations, depreciation, bad debts, accident costs and 
insurance costs, with the sole exception of insurance costs which 
were a charge up to July 1, 190i8, but not since. Were these 
(excluding interest) charged against the fluid milk business in 
'New York alone, using the same percentage above referred to, 
it would reduce the "total figures about $55,000' for the year ending 
June 30, 1908, and about $75,000 for the year ending June 30, 
1909. 

Fourth. The statement as to the net profit " on fluid milk and 
cream, E^ew York and Chicago " for the nine months ending Sep- 
tember 30, 1909, amounting to $1,076,772.15 which covers both 
the East and the West is also manifestly unfair. It selects the 
months of the year of the greatest profit, and ignores the three 
months (October, E^ovember and December) when the profit is, 
and always has been, even under the most favorable conditions, 
at a low ebb and, as far as 1909 is concerned, it is especially 
misleading as since September 30, 1909, the prices paid the 
farmers for milk have been greater than has ever been paid be- 
fore in the history of the compiany and the freight rates to ISTew 
York have been increased eight per cent. 

Fifth. Owing to the increasing distances from which fluid 
milk must be transported to the city with consequent increasing 
freight charges and to the facts that the Borden company does 
its bottling at its plants in the country and not in the city with 
consequently increased cost of outlay in handling and other re- 
spects, that it makes twice a year six months contracts with the 
farmers by which it is ohligated for that entire period notwith- 
standing the conditions of the consuming market and notwith- 
standing lower prices paid by concerns which only buy from hand 
to mouth and that it spares no expense to keep' its milk up to its 
.■standard both in respect of its inspection of dairies and in the 
condition of its own plants, the delivery of milk in New York 
oity for this company is an expensive proposition. Every quart 
of bottled milk delivered by the Borden coimpany to the New 
York consumer during the month of October, 1909, for eight 
<!ents actually cost the company 8 187/1000 cents. During the 



1^0. 45.] 239 

montlis of JTovember aud December, when the price was nine 
cents, tlie respective actual costs w^ere 8 633/1000 cents and 
8 826/1000 cents and a careful estimate places the delivei*y cost 
for the months of January, February and March, 1910, at 
8 850/1000, 8 743/1000 and 8 11/100 respectivelj. 

The cost naturally decreases in the spring and summer when 
the cost of milk, owing to open pasturage and the cost of de- 
livery, owing to absence of snow and winter storms, are less. 

Sixth. Mr. Scudder gives the profits "on fluid milk alone in 
Isew York alone, for the year ending June 30, 1909, at 
$496,976.36." Even assuming the correctness of Mr. iScudder's 
basis of arriving at the profits, this is 1 73/100' per cent, on the 
entire present outstanding capital stock of the company, it is 
1 98/100 ]Der cent, on the present actual tangible asisets of the 
company, it is a profit of but four and one-tenth mills per quart, 
and a percentage of profits on the entire gross sales of fluid milk 
during that year of but 5 2/10 per cent., and, if the $75,000 
for additional expenses above referred to be taken into considera- 
tion, this 5 2/10' per cent, would be reduced to 4 4/10 per cent. 

If the Borden company had for the year ending June 30, 1909, 
sold for an average profit of one cent per quart sill its- " fluid 
milk alone, i^ew York alone,'' its profit, instead of being 
$496,976.36, as figured by Mr. Scudder, would have been on the 
same basis $1,202,233.14. If it had for the year ending June 
30, 1909, sold for an average profit of one cent per quart all its 
" fluid milk and cream, E'ew York and Chicago " its profit, in- 
stead of being $793,6>22.0'5, as figured by Mr. Scudder, wonld 
have been $2,130,214.75. 

While in dollars and centsi the profit may seem large, it should 
be ludiied in view of the mamiitude of ihe, Borden business and 
the figures given above show not a reasonable, but an inadequate 
return whether based on sales or on any other basis by which 
what is a fair and legitimate profit is determined in any other 
business and especially in a business dealir.g, with all its obvious 
risks, in a perishable product. 

Seventh. Mr. Scudder in stating the total net profits of the 
company for the year ending September 30, 1909, made an error 
by concluding that in a certain account a six-months' period was 



240 ['Senate 

a three-montlis' perio'd. As I and our aoconintaiits figure, the 
total net profits as given by him shoiild be reduced by 
$128,14-9.92, making the total net profits, $2,488,8-7'9.48. The 
great bulk of this profit come'S from our Manufacturing Depart- 
ment. Taking Mr. 'Scudder's profit on ^^ fluid milk alone, 'New 
York alone '^ for the year ending June 30, 1909 (viz., 
$496,976.36), it is but 22 63/100 per cent, of our total profit 
from all sources. 

Eighth. The actual tangible assets of the company (exclusive 
of all good v^ill, patents and trade marks) amoimt, by actual 
book value, to $25,134,442.96. The total net profits as given by 
Mr. Scudder for the year ending Sept ember 30, 1909, less the 
error of $128,149.92 above referred to, represeints a profit of 9.90 
per cent, on the gross tangible assets and 8.67 per cent, on the 
entire outstanding capital stock. As has been said, the great 
bulk of this profit comes from our Manufacturing Department 
and it cannot be disputed that a manufacturing company is fairly 
entitled to earn at least a minimum of 10 per cent, on the value 
of its actual assets or, in other v^ords, on the amount it actually 
has invested in its business. 

!N^inth. It does not seem necessary, as germane tO' this inves- 
tigation, to discuss the question of the company's good v^ill, but 
so long as it was referred to in Mr. Scudder's testimony some 
facts regarding it may be of importance. If Mr. Scudder, in 
using the term ^' balancing entry,'' meant tO' imply that no con- 
sideration was given to the question of the value of the company's 
good will at the time of the incorporation of the present com- 
pany in 189'9, he is wholly in error. The business of the Borden 
company was established in 1857, over fifty years agO'. It was 
the pioneer in the condensed milk business. It was the pioneer 
in the present scientific methods of pro'ducing and handling fluid 
milk. It sells its products in every state in the Union anid prac- 
tically over the entire world. It owns numberrless brandsi and 
trade; marks appertaining to itS' manufactured prodH'ct, many of 
them registered in foreign countries. It owns many patents and 
processes and formulas of great value. It has the accumulation, 
in its records, its literature, its knowledge of the trade throughout 
the world, its relation to the farmer, its organization, of over Miy 



Ko. 45.] 241 

years of successful business. Every court, whether State or Fed- 
eral, has repeatedly held that good will is property and a proper 
subject for stock issue. To say that such a good will as the 
Borden company has is water, or was valued merely as a balanc- 
ing entry, would hardly seem to state the case fairly. 

Furthermore, the entire outstanding capital stock of the com- 
pany is $28,692,200, and deducting the actual tangible assets of 
$25,134,442.9'6 leaves $3,557,757.04. As a matter of fact, therer 
foj'e, the excess of the par value of the outstanding stock over 
actual tangible assets, or the amount of stock represented by good 
will, patents and trade marks, is but $3,557,757.04. 

Tenth. The increase in tangible assets since 1899 is owing to 
the wholly inadequate value then placed upon them, to the build- 
ing of new plants and to the sale of increased issues of stock ; and 
in every case such sale for cash required to provide for the in- 
creasing needs and expansion of the business. 

Eleventh. The increases of 1909 over 1908 as shown by Mr. 
Scudder were caused largely by the decreased cost of milk and the 
increase in the volume of business ; such increase being caused 
partly by the normal and regular increase and partly by the in- 
crease owing to the improved financial conditions in 1909 over 
1908, especially over the first six months of that year. It is 
hardly appreciated what a falling ofi there is in consumption, 
especially in cream, during a period of financial depression. 

Twelfth. Without repeating what has been said above, the posi- 
tion of the Borden Company is that, as far as it is concerned, it 
cannot, under conditions as they are to-day, sell milk in the city 
of l^ew York, and maintain its present standard of excellence, at 
an all-year price of eight cents and at the same time make a profit 
which, to any fair-minded person or on any basis, would be at all 
adequate, legitimate or reasonable. Even by increasing to nine 
cents during the winter months, the company does not consider 
that the profit per quart or the profit on gross sales, as shown by 
the figures above given, would come within that depreciation. If 
by its ability, organization and economies the company is able to 
do a large volume of business at a very small profit it does not see 
any reasonable ground of criticism because, by reason of such 
large volume, the very small percentage of profit may in the aggre- 
gate amount to a large sum." 



242 [Senate 

In our Eoute Department we sell fluid milk, cream, unsweet- 
ened, condensed milk, butter, buttermilk, cbeese, casein. 

(See' Exhibit 6-A and 6-B.) 

At the time that our Board acted on that question, they had 
already been advised of the fact that milk sold in October at eight 
cents meant a loss of about one-fifth of a cent, and that ^N^ovember 
and December and the following months would mean consider- 
ably more of a loss at eight cents ; they knew that the period from 
October 1st to April 1st always was an exceedingly lean period; 
and they knew that we had contracted for the delivery of milk 
from the farmers during that period of six months at a price that 
was the highest ever paid in the history of the company; and it 
was all those facts taken into consideration that brought about the 
raise in the price of milk, and nothing else. Our bottled milk 
has been sold at eight cents without interruption from 1887 to 
1907. iSometime in November of that year it was made nine 
cents. It continued until March 2d at nine cents, and despite the 
fact that we got nine cents for our milk during that period, esti- 
mated on the same basis as Mr. Scudder's figures, it would show 
a loss in bottled milk. I have been assuming in answering ^' Yes '^ 
to these questions as asked by you, that they corresponded with 
records las found; but, of course, none of them include any charge 
for depreciation, or accident cost, or insurance cost, except as 
noted, or bad debts, or interest on investment. In the case of bad 
debts and accidents, they become a charge against what we call 
our '^ Guarantee Fund," and insurance costs become a charge 
against our Insurance Fund, and depreciation against Deprecia- 
tion Fund. Provision is made from the earnings of the company 
for those funds. 

On June 30, 1909, the total capital stock of the company was 
$25,000,000, of which there was issued for trade mark, patent and 
good will, $15,428,40'8.46. The company was organized with a 
capitalization of $20,000,000. Of that amount $4,070,591.54 was 
paid for the assets of the I^ew York Condensed Milk Co. I paid 
for 20,000 shares of the capital stock of Borden's Condensed Milk 
Co. at $25 per share. The 'New York Condensed Milk Com- 
pany's capitalization is $3,000,000. 



]S^o. 45.] 243 

(x^t the conclusion of the examination of this witness, Mr. Mar- 
shall produced the following statement which was read into the 
minutes. ) 

'' 'No one is more concerned than the Borden Company in keep- 
ing down the price of milk to the consumer and in making the pro- 
duction of milk profitable to the farmer. This company's profits 
depend upon the volume of its business. To increase the retail 
price cuts down the consumption and diminishes the volume. 
Also if the production of milk is unprofitable to the farmer, he 
ceases dairying. This compels the Borden Company to go fur- 
ther for its milk supply and to pay more for freight, icing and 
additional stations. 

The Borden Company has no connection of any kind, direct or 
indirect, with the Consolidated Milk Exchange. I^either is it 
now or ever has been a party to any combination or agreement for 
the purpose of fixing the price of milk. 

The business of this company, which originally was the manu- 
facture of condensed milk, was founded in 1857, fifty-three years 
ago, upon the patents of the inventor, G-ail Borden.* 

In manufacturing condensed milk, it was soon discovered that 
it was absolutely essential to obtain a high grade of sanitary milk 
to insure keeping quality. It thus became necessary to originate 
and enforce rules and regulations under which farmers supply- 
ing milk by contract would produce clean, pure milk, under the 
most sanitary conditions. In 1887 the company began the bottling 
of fluid milk in the country for sale direct to the consumer in the 
city. Milk bottled in the country where it is produced under strict 
sanitary supervision and delivered to consumers under original 
seal, containing all the constituents of the milk as taken from the 
cow, stands in a class by itself, both as to quality and freedom 
from germ contact. 

The freight rate on bottled milk, such as the Borden Company 
furnishes, is much higher than on milk shipped in bulk or in 
forty-quart cans, and again there is a high extra expense involved 
both in the labor of handling bottled milk and the loss and break- 
age of bottles, and the heavy costs for icing to insure against bac- 
terial development. 

During the twenty years, from 1887 to 1907, the company 



244 • . [Senate 

charged the consumer a uniform price of eight cents per quart. 
In the meantime it gradually raised the price paid to the farmer. 
When the increased price paid by this company to the farmer had 
risen 40 per cent, the Borden Company, on ]^ovember 18th, 1907, 
raised the price to the city consumer to nine cents per quart, 
lowering the price again to eight cents in the spring of 1908, at 
which time the price to the farmer was also reduced. Again on 
October 1, 1909, the price paid to the farmer was increased for 
the period covered by the winter contract to the highest price ever 
paid to him, and the Borden Company, on November 1st, in- 
creased the retail price of milk 1 per cent per quart. 

Had this company continued to charge the consumer eight 
cents, being obliged to pay the farmer the high price covered by 
the winter contract, it would have sustained an actual loss on its 
bottled milk business in the Metropolitan district in the month of 
I^ovember, a still greater loss in December and for the balance of 
the contract period/ 

During the years this company continued its uniform price 
of eight cents for milk to the consumer, the price of feed increased 
to the farmers as follows : Bran, 79.54 per cent. ; middlings, 
62.58 per cent. ; oil meal, 37.33 per cent. ; corn, 103.82 per cent, 
and oats, 73.26 per cent. The Borden Company increased the 
price to the farmer for milk, 42 per cent. The railroads in- 
creased their freight charges to the Borden Company 23 per cent, 
and the Borden Company paid increases of 20 per cent, to 25 per 
cent, in wages. Yet the company during this time has met all the 
increase in cost of milk, transportation and labor, owing to the 
volume of business, without increasing the charge to the public, 
for a specialized quality of bottled milk with the exception of the 
winter months of 1907 and 1908 ; and the present period since 
!N"ovember of 1909. The increase in the price of milk from eight 
cents to nine cents represents 12^ per cent, or less than one-third 
the percentage increase in other food products. 

The price of milk to the farmer is governed by the wholesale 
price of butter and cheese. To secure superior milk with the at- 
tention paid to the Borden sanitary rules, this company must pay 
a considerably higher price than a butter, creamery or cheese 
factory. 



Xo. 45.] 245 

The wholesale price of butter has increased 63 per cent, the 
wholesale price of cheese 73 per cent. The retail price of butter 
and cheese has correspondingly increased. This is greatly due to 
the fact that butter and cheese go through many hands, by the 
Borden method goes direct from the producer to the consumer 
with only one profit. Mr. Marvyn Scudder, accountant to the 
Attorney-General states that profit to be 5.2 per cent., not allow- 
ing for depreciation, bad debts and accidents or less than one-half 
cent a quart. Compare that half-cent with the commission-man's, 
wholesaler's, jobber's and retailer's profits on a pound of butter or 
cheese or a dozen of eggs. 

Realizing that the increased cost of bran, oil meal, oats, corn 
and other milk feeds diminished the farmer's profits, the Borden 
Company is arranging to co-operate with the farmers in assisting 
them to secure cows of greater productive capacity, with pure 
alfalfa seed and instruction in the raising of alfalfa and root 
crops and in other ways to diminish the farmer's feed bill and 
increase his profits. The average cow produces less than 3,000 
quarts of milk per year. To increase this production by better 
breeding to 4,000 quarts is a moderate expectation. To substi- 
tute home-raised feed for purchased feed w^ould make additional 
profits to the farmer. Either the production of milk must be 
more profitable to the farmer or the supply will continue to di- 
minish. 

Records of this company show that the average dailj' produc- 
tion of milk per dairy has fallen from 141 quarts to 109 quarts. 
Every such decrease necessitates the Borden Company going 
further afield for milk,this increasing the costs of transportation 
and icing, as well as the cost of receiving stations. It is of vital 
importance to the Borden Company to find some solution of how 
to increase the farmers' profits, and prevent a further tendency 
of the dairyman to go out of a business which he considers no 
longer a profit maker. The Borden Company knows that after 
paying the highest price ever paid by anybody to the farmer, that 
Borden's bottled milk laid down on the Xew York doorsteps costs 
the Borden Company to-day almost nine cents per quart without 
any charge for depreciation, bad debts, accidents, insurance, or 
allowance for cash invested in plants. 



246 [Senate 

There are four parties interested in the milk business; the pro- 
ducer, the transporter, the distributor and the consumer. Of these 
four, the consumer has borne the least share of the general in- 
crease. The retail price of other food products — meat, butter^ 
eggs, lard, cheese and flour — has increased on an average of over 
40 per cent. The best and most wholesome milk — the kind that 
the Borden Company sells — has increased only 12^- per cent. 
That this increase is comparatively so slight is due to economies, 
the direct handling, and the efficient organization of the Borden 
Company, and to its policy of small profits and a large volume of 
business. 

An examination of the statistics will show that the territory 
supplied by the Borden company received a far greater percentage 
of safe, sanitary milk, at a lower price, than any other cities in 
the United States.'' 

BOKDE^sT'S COE'DENSED MILK CO. 

Wm. J. EOGEES, 

President." 
Stephen C. Millett: 

I reside at Irvington on the Hudson. I am at present a di- 
rector of the Mutual Milk & Cream Company, and have been 
since the spring of 1907. I have never been an officer of the 
company. I was a member of the board. I am connected with 
Millett, Boe & Hagen, bankers. I did not consult with any one 
connected with my company before the price of milk was raised to 
nine cents, on or abou't l^ovember 1, 1909; but I know that it 
was raised. I heard of it at the meeting of the board held a 
day or two before I^ov ember 1st; that, is my recollection. We 
would have liked to raise it before that, but we waited until the 
other companies all did. Mr. Kavanaugh telephoned me and told 
me that Borden's had raised their price to nine cents. I had 
some discussion with the officers, with Mr. Kavanaugh and the 
rest of the board. The matter simply came up from time to 
time that milk was being sold too cheaply. I should say that 
might have been a month previous. The experience of a year 
ago proved that we were facing a heavy loss if we continued at 
eight cents. My board did not authorize me or any one else to con- 
sult any other milk dealers to see if we could get them to agree 



'No. 45.] 247 

to this contemplated raise. My own business judgment told me 
tliat tliat was contrary to law. I could not tell what percentage 
of milk we bought on Borden's and what on Exchange prices. 
I think buying milk and setting the price from month to month 
is the ideal way. The Exchange sometimes makes prices in the 
middle of the month. The butter and cheese price would influ- 
ence the price we pay. We can afford to pay more than the 
butter and cheese price. In my opinion, the butter and cheese 
price is the controlling price in milk. I do not mean to say that 
the New York market does not pay more, but we have to pay 
more to get the milk. I did not discuss with any one the question 
of the advisability or necessity of raising the price of milk prior 
to N^ovember 1, 1909. I did not authorize any ofiioer of my com- 
pany, or any employee of my company, to consult with or hold 
any communication with any ofiicer or director or employee or 
representative of any other milk company, prior to ITovember 1, 
190i9, in reference to an advance in the price of milk, and I do 
not know of any such consultation or communication. I know 
Mr. Marsden, and I think I have met Mr. Dunlevy Millbank of 
the Borden Company. Mr. Marsden is a member of Blair & 
Company. I never had any communications with either gentle- 
man. Of the Sheflield Earms, Slawson & Decker Company I 
know Mr. Van Bomel. I know T. 0. Smith and Christ. Yagts 
of the Consolidated Milk Exchange. I had no conversation with 
them prior to iN'ovember 1st, relative to the raise in price. I 
think it is three years since we have had a representative on the 
Consolidated Milk Exchange. I do not know as there is any prac- 
tice prevalent in my company for the purpose of standardizing 
the milk by means of separators; although I think we have 
separators in m^y creameries. We made more money in 1909 
than we did in 1907 and 1908. I understand that Mr. Kavanaugh 
was approached during the late winter or early spring of 1909, in 
reference to the proposition to start a campaign of education in 
order to educate the public ujd to the idea of paying a higher price 
for milk through newspaper articles. The proposition was 
that we were to contribute money for the distribution of articles 
calculated to show that the price of milk should be raised. We 
tuVned down the proposition. We are at present selling milk for 



248 [Senate 

eiglit cents a quart. We lowered our price because we found our 
competitors were selling the milk at a figure less than nine cents. 
I sell milk at wholesale less than eight cents a quart. Two condi- 
tions govern the basis of our basis price: Bordens and the Ex- 
change^ and our independent purchases, from month to month. 
We prefer to buy on the market. I consider Bordens is a pure 
gamble for six months. The market is the general price paid in 
the competitive centers for milk, at that time. I speak primarily 
of Pulaski. There is more competition at that point. There are 
two or three creameries there. It is not customary for other 
'New York milk concerns which have no creamery at that par- 
ticular point to step in and buy from these other independent 
factories. As a rule in New York no one can afford to sell for 
more than Borden; that is generally accepted among milkmen. 
My recollection is that we had a meeting of the board on the after- 
noon before the notice was sent out that prices would be reduced 
from nine cents to eight cents. I think this meeting was in the 
latter part of January, the 23d or 24th. Very often I think, we 
wait until Borden has rdade his price to farmers before we go into 
the country to buy milk and clo<se our contract with farmers. 
Undoubtedly, Borden's price fixed to the consumer would be a 
factor of influence. 

Louis J. Millek: 

My place of business is at 90 East One Hundred and Tenth 
street. I started in business under the name; of the Harlem 
Dairy Products Company. I obtiained my milk from W. Weed, 
Kome, ^N'. Y. He supplieid me with milk four daysi. He sent 
one of his men over to me, and he said we can't ship you any 
more because the health depiartment stopped usi from shipping 
milk from Rome, ^^T. Y. He shipped to other dealersi in the city 
the same night. To the United Milk & Cream Company. They 
got milk in the cans that were intended for me, that was how I 
know. We were there at the station when the milk came in, and 
we watched thei train when it came in from Rome, and while 
we went over tO' get our tickets in the office of Mr: Harris, he 
said there isn't any milk from Rome for the Harlem Dairy Com- 
pany. Then I went over to the> train and found out the milk 
from Rome, iN". Y., came to the Harlem Dairy Company, and 



Xo. 45.] 249 

the United Milk & Cream Company get it. I saw the cans 
marked for the United Milk & Cream Company, in fact, it was 
some of our cans, twelve cans with our own mark L. M. B., 
meaning Louis Miller & Brother. That was the name before we 
went in the milk business. We were in the cream business before 
under that name. Before I stopped off with Weeds, I saw Mr. 
Carpenter of the Phoenix Cheese Company and asked him if he 
could ship me any milk. Then he said he could, he guess, about 
sixty cans a day. But when I had a contract with Weed I didn't 
care to make any other contract with Caipenter, because that 
would be too much for me; but the same day that was stopped 
off to me, on Monday, October 12th, I was asking Mr. Carpenter, 
Tuesday morning, and I told Mr. Carpenter, could you help us 
out with some cream to-night, and he said, I guess about twenty 
cans to-night. Mr. Carpenter sent us the same night twenty cans 
of milk, instead we were supposed to get forty cans from Weed, 
and we got only twenty cans the same night from Mr. Carpenter. 
I made a contract with Mr. Carpenter to supply me sixty cans 
a day until April 1, 1910. The Milk Dealers' Protective Asso- 
ciation off'ered Weed ten cents a can more on milk than I paid 
him. I paid him ^Ye cents above quotation, and they gave him 
fifteen cents above the Xew York quotation and took away the 
milk from me. Blefford went around to the customers that I 
sold to. He is a can collector for the protective association. He 
went on the wagon imder the name, ^' George Blefford, Milk and 
Cream .Dealer." He went straight to every one of our customers 
and offered them milk at $1.80, that is, fifty cents below what I 
sold it. I got this information while I was in a place where he 
offered the milk and I heard him say $1.80, and then the cus- 
tomers that he offered went and told me there is a man came 
around by the name of Blefford and he offers milk to every cus- 
tomer, contract for six months, cash security $50, to every 
customer, milk tO' be sold to them at $1.80 per can, and if the 
price shoidd. be lower in Xew York city, then he would come 
down on his price accordingly. The names and addresses of 
some of these parties to whom these offers have been made are 
Tone Helfand, 1332 Park avenue; Isaac Posner, 57 East Ninety- 
eighth street; Theodore Silber, 99 East One Hundred and 



250 [iSlENATE 

Eleventh street; E'athan Mogeliif, 401 East Seventy-eiglitli 
street. Tliey have stopped the dead v^agon for the last three 
weeks. About the time this investigation started. Eirst^ Blefford 
v^ent around v^ith the name, Joe Blefford, and then v^hen I 
showed hisi card to all the customers that he belonged to the asso- 
ciatiion, the can collector, they stopped him off, so he went to 
work and had his wagon painted over under the name of the Cen- 
tral Dairy Company, and he went around and offered again the 
same customers with the new wagon, and when they asked him 
why he changed his name, he said because there is anotherr Blef- 
ford in the business, is a collector for the association, and Miller 
says I am the Blefford, and I have io change my name under the 
name of the Central Dairy Comj)any. Mr. Levy of the Levy 
Dairy Company came to see me, and said I shouldn't bother the 
trade. Of course I knocked the price. He told somebody else 
that if I did not stop that he would get square with me. I have 
about fifty customers to whom I have sold milk, and those fifty 
customers claim they can't buy my milk because there is a new 
milkman now under the name of Blefford or Central Dairy Com- 
pany who is offering his milk fifty cents below; we don't want 
you; the man gives a contract for six months, $50 cash security, 
and he guarantees us from any trouble of the. health department.; 
why should we be afraid of him to take his milk, and say why 
should we buy yours and pay you fifty cents on every can of 
mdlk. That was the answer of every grocerman. When I was 
selling ten cents below the association price, I had a profit of 
twenty-three cents on a can. That was grossi profit. The asso- 
ciation price is thirty-eight cents above the Exchange price. That 
is the rule year after year. Above the Exchange, except the 
freight, they charge you extra. Ebr instance, to-day the market 
is $1.70 in the Milk Exchange and thirty-two centsi freight, that 
will be $2.02, and thirty-eight cents will make $2.40. The 
gi'ooermen sell dipped milk at the present time from six cents to 
seven cents a quart. I sell milk only by the can to stores. I 
buy some of the cans of the Ironclad Manufacturing Company 
and some of the Dairyman's Manufacturing Company. 



Iso. 45.] 251 

iNTATHA^ MOGELUF I 

I reside at 401 East Seventj-eighth street and am in the grocery 
business. I sell milk. Store is at the same place as residence. I 
know Miller Brothers. I am buying now of them. I commenced 
buying about six months ago of them. I didn't have any agree- 
ment. He promises me that he will not raise in a year. Suppose 
he sells ten cents lower in price than the Exchange market. 
Miller said he would do that. By Exchange price I mean the 
price of the Milk Dealers Protective Association. That is always 
thirty-eight cents above the Exchange price. Miller agreed to 
sell me ten cents below the Exchange price. That is the retail 
milk dealers' price. That would make it twenty-eight cents above 
the Exchange price. (Copy of contract signed by Blefford to in- 
duce witness to buy from him copied in the evidence, reading as 
follows) : " I, George Blefford, agree to serve l^athan Mogeluf at 
401 East 78th Street, IT. Y. City, milk according to rules and 
regulations of the Board of Health from ]!Tovember 7th/09 to 
I^Tovember 7th/10 at 12 cents below Exchange price $1.92. 

" GEOKGE BLEPFOKD, 

'' 427 East 9th St., ITew York City.'' 

^' Exchange price for the coming year." 



Yes, Blefford gave me the following card : 

*' Telephone 2572 Lenox 

" GEORGE BLEFFORD, 
^^ Whot^esale Dealer in 
" MILK AND CREAM 

"427-435 East 90th Street, 
"Residence 428 East 89th St., :N'ew York." 

About two weeks later he gave me the following card : 

" CENTRAL DAIRY COMPANY 

" Wholesale Dealers iis- 

" MILK & CREAM 

" 428 East 80th Street, 

" New York." 



2'52 [iStENATE 

I have known Blefford about five months. He came tO' me about 
two weeks from the time I started to buy milk of Miller. Oostly 
also came to me. His place is First avenue between Seventy-sixth 
and Seventy-seventh streets. When I started to buy milk of 
Miller about two weeks, Costly came to me, he says why I 
shouldn't buy milk of him ? I says ^^ Because I get it ten cents a 
can cheaper. I use three cans a day, is thirty cents." He says, 
"I couldn't give it cheaper the milk, but he wouldn't stay long, 
that Miller wouldn't stay long in the business and you would have 
to buy of me again anyway." " Well," I says, '' You sell me any 
time if I come to you, if I pay, you will sell to me." He says, 
" Certainly I will." • So all right, about two weeks after I buy 
milk of Miller, Blefford came to me and asked, ^^ Where you buy 
milk ?" " From Miller." " How much do you pay ?" I said, 
" So much." Blefford says, " I got a' new business." He says, 
'' I am a farmer and my father is a farmer and we have milk. 
We sell milk wholesale in 'Neiw York city, about 130 cans." He 
says, " In a car is 180 cans and we have got 50 cans and we have 
to pay anyway for the whole car." He says, " Freight, that the 
milk don't cost mo anything to deliver it from the country and I 
can sell it for $1.80 to you." I says, ^^All right. Make forty 
cents a can cheaper is a whole lot of money." " Will you make a 
contract? " I said, '^Certainly, I will." He started to make the. 
contract. ^[ I will be here again to-morrow." I couldn't make it 
now because I don't know how to make out a contract. I asked 
him for one of them. '^ I will be here again to-morrow." He 
came again to-morrow and we made the contract. (Same eontract 
already went in the record. ) I said, ^' Bleiford, suppose you were 
short of milk, what am I going to do ? " He says, ^' Take $40 of 
my cash as security, and if you don't have milk you will have 
$40." ^^ I told him that isn't eno'ugh, $40. What am I going to 
do that time if I can't get milk two or three days, I lose the whole 
trade." He says, '^ I will give you $40 cash and one week milk, 
but the week milk you have got to pay for, not now, but in a year, 
if you finish the contract, then you pay me." He says, " All 
right, I am satisfied." He makes the contract. " I will buy after 
the first week." I told him that on Sunday. Of course, Saturday 
I settled with Miller, and Sunday — that was I think about Wed- 



nesday. Wednesday Miller came to me and said, ^^ Blefford was 
here? '' I says, "Yes.'' He says, " To sell you milk? '' " Yes." 
I told Miller that I like to stop to buy milk because I get it forty 
cents cheaper. He showed me a card like the same card, but on 
the card was can collector of the association. The following is 
the card : 

" MILK DEALERS PROTECTIVE ASSOCIATION^, 

'^ 621 East 12th Stiieet, ISew Yokk City. 
" GrEORGE W. Bleffoed, Can Coelectoe.'' 

Yes, that Avas the card that Miller showed me. At that time I 
told him what I would like to do. The man told me he was a 
farmer, that was the reason he sold milk because it wasn't ex- 
pensive. He says, " If you don't want to believe me, buy milk 
of him, but I know sure that is the Milk Association." Well, it 
was Friday, land Friday I went to the telephone, the same num- 
ber, I think that is the same number, and I called upon the same 
number on the telephone and I asked him, '' Who are you ? " He 
says, " I am the stable man from the Mutual." " Where is Blef- 
ford now ? " He says, " He will soon be there." " Well, tell him 
he shouldn't bring any milk Sunday." Of course, I see this is not 
right. Blefford didn't come to me, and he delivered milk Sunday, 
two cans, and Miller brought milk. I didn't use any milk of 
Blefford. Of course I wanted to make the forty cents and I used 
Miller's milk. Monday he didn't come and -he didn't take any 
milk, and the milk stayed outside. I didn't use his milk. I let 
it get sour, left it outside. Monday Blefford came to me, " Why 
didn't you use the milk," he said. " Well, I found it was from 
the Association, I didn't want to bother. I have to bother one 
week with you and you lose your $40. I don't want to make the 
$40, make me more trouble than the $40." He said, " You 
wouldn't buy of me ? " I said, " Why, of course, I know you are 
of the Association." He said, " [NTo." The next week he came 
with another card, headed '^ Central Dairy Company." He came 
with a new wagon and new cans, about fifteen new cans. He took 
the milk away from me. He says, " Well, you use my milk ? " I 
said, " I couldn't use it. I couldn't stop buying of Miller. Of 
course, I know this thins: sure, vou have arot the milk from the 



2'54 [Senate 

Association." lie says, ^' You don't believe me? '' I said, ^' Cer- 
tainly, I don't believe you." After a week be came again. He 
said, ^' Well, you wouldn't buy milk of me ? " I said, '' ISTo, cer- 
tainly I wouldn't. If I know sure tbat tbe milk belongs to you, 
tbat you got it from your farm, I would be glad, if I can make 
eigbty cents or $1 a day, wby I make it." He says, ^'All rigbt." 
He sbowed me tbe new card of tbe Central Dairy Company. I 
said, ^^ Witb wbom you partner?" He said, '^ My fatber." I 
asked bim, '' Wbo is tbe Company ? " He said, " My fatber and 
I." All rigbt, I says, '' 'Now I wouldn't buy any." '' Wby ? " 
'' Because I don't want to." He said, "All rigbt, I will bring to- 
morrow my fatber bere and be will explain to you tbat be is tbe 
farmer and be is responsible for me, tbat if I wouldn't sell you 
milk, be will be responsible." "All rigbt, bring your fatber," I 
said. Tbe second day an old man came and be says, " Tbis is 
my fatber." Tbe old man speaks German. I asked bim, " Is tbat 
your son ? " He said, " Yes." He even couldn't speak good any 
more. Maybe be do extra, I don't know. He couldn't speak. 
^' Do you know Bleiford ? " He said, " Tbat is my son." I said, 
" Wbere do you live?" He said, "I live in tbe country." I 
said, " Have you got a farm ? " He said, " Yes." I said, " Have 
you got milk ? " He said, " Yes, I got milk." I said, "All 
rigbt." He says, " I want to sell to you, my son togetber in part- 
ner." I said, "All rigbt." He says, " But you don't believe me. 
But be said tbat is my son and we will, sell cbeaper tban tbe 
Association." Tben I promised bim again. I believed bim wben 
tbe fatber came witb bim. I promised bim again, and tbe second 
day I told bim be sbould come and make witb me a contract, a 
new one. He said, "All rigbt," but on tbe second day be didn't 
come any more. I told bim, " Blefford, I know for sure you are 
from tbe Association. Of course, I see your card and at tbe bot- 
tom of tbe card is can collector." He said, " Tbat is my 
brotber." 

Geoege L. ^i colls : 

I am a director of tbe Borden Condensed Milk Company and 
bave been about ten years. I attend tbe directors' meetli^gSy 
acting on committees. I am a]so general counsel of tbe company. 
I know none of tbe directors of tbe Mutual Milk & Cream Com- 



No. 45.] 2i5'5 

panj or Sheffield Farms Company personally, except Mr. Ely 
who is a member of the Consolidated Milk Exchange. I have 
never been present at meetings where the raising of the price of 
milk was discussed. Speaking of the good will of the Borden 
Condensed Milk Company, that matter was given very careful 
consideration. All the elements that go to give value to good 
will, past earning capacity, were carefully considered, and the 
company was advised by my firm, as counsel, as to the legality of 
the stock, and the directors passed on it as a practical business 
proposition. 

Christian Oher: 

I reside at 154 Eagle street, Brooldyn. Am a milk dealer. 
I own the l^ational Dairy Company. I sell bottled milk. Prior 
to November 1st the price of my bottled milk was eight cents. 
I did not raise the price to nine cents. I have never raised the 
price to nine cents. I attended a meeting in Williamsburgh, at 
Ten Eyck and Lorimer streets. I believe John P. Wierck, G. C. 
Weatherhorn, George' Kyder were there, and there were a lot 
of South Brookhii people, but I don't know their names. The 
speaker, John P. Wierck, presided, the president, he was the 
first speaker. I came in late. The oaily thing I heard was ar- 
rangements being made for a banquet in St. Mark's Hall, Man- 
hattan. I atteaidied that banquet. Mr. Beakes made a speech. 
The Empire State Produce Company, Otto Huth, manager, told 
me to go do'^vn to this meeting in Williamsburgh. There were 
railroad fellows at the banquet. Some one from the Lehigh 
Valley, New York Central, and D. L. & W., and I belie^'e there 
was some one from the Ontario & Western, if I am not mistaken. 
I d'o not know of any other meetings outside of this one that I 
have mentioned. I was talking with a friend of mine to the effect 
that milk should be. nine cents, but we did not d'are to take the 
step because we would probably lose the business, and I sell 
wholesale at the same time, and I did not think it was necessary 
to go to nine cents, and I couldn't get it. The class of trade I 
have got would hardly pay nine cents. In my business, one man 
and a horse takes out from fifteen to thirty cases of twelve bottles 
each in a day. I have four creameries. One creamery is near 
Amsterdam, N. Y. : one near Oneida ; one is on the other side 



2'56 [Senate 

of Oneida; and one in Uniondale, Pa. In one place I buy on 
Borden's price ; another one I pay ten cents above Excbange ; and 
in another one I pay Exchange prices. My agreement, when I 
buy at Exchange prices is, ^' I will buy your milk for the Ex- 
change price, or five cents above or Rve cents below/' etc. That is 
the contract. When I buy on Borden's prices, I pay what Borden 
pays. If they drop, I do the same. I don't think I am losing 
anything on milk at eight cents. I do not make so much in the 
summer. There is loss of bottles and expenses attached to it, 
shrinkage, etc. We fill about 240 cases, and we lost two cans of 
milk shrinkage. N^ow, when you pay $1.70 in the country for 
milk and thirty-two cents freight, you simply will bring that up. 
The price is pretty low, and horses and horse feed are high. The 
lowest price that I got milk last summer is a dollar a can. That 
is two and one-half cents a quart. I make a little more profit 
during the summer months than I do in the winter months. In 
the summer you have to buy ice. 

John Paul: 

I am vice-president of the Mutual Milk & Cream Company 
and was elected April 2, 1909. I was a director one year pre- 
vious to that. Am in the mamufacturing business. Separators. 
The DeLaval Separato-r Company. I am cashier. I never have 
been to any of the meetings of the Mutual Milk & 'Cream Com- 
pany, other than directors or stockholders. I remember the mat- 
ter coming before the board with reference to fixing a price to 
producers of milk. I cannot specify particularly one case, but 
it was done frequently. The matter of fixing prices in the 
country is brought up from time to time and usually referred to 
the executive committee. Borden's and Exchange prices are 
usually mentioned as a basis. We repeatedly establish a price 
at our meetings, that is, independent of Borden's or Exchange. 
It is possible to adjust a separator so that it will run milk at a 
certain percentage of butter fat and save the excessi of cream. 
I don't know whether a separator could be adjusted to leave 3 
per cent, or 3^2 per cent, of butter fat in the milk. We ad- 
vanced the price previous to N'ovember 1, 1909, but we couldn't 
stand out alone and keep up the price, and I should say that our 
desire was to get all the milk dealers to advance the price. I 



'No. 45.] 257 

think the advance was generally about November 1st in the price 
of milk. It happened to be concerted action. Borden's started 
the ball rolling and every one went np. I think there was some- 
thing in the discnssion that I had previons to N^^oveniber l&t in 
which the date Xovember 1st was mentioned as the day when the 
price should be raised^ or could be raised advantageonsly. I 
think the matter of the discussion of the raise in price of milk 
was mentioned from time to time, as of October 1st, Xovember 
1st or December 1st, for that matter. I understand that when 
the change was to take place it was to be October 1st. October 
to April is the winter price and April to October is the summer 
price. I think they are all anxious to go independent of any 
concerted action. I have never had any communication with any 
of the officers or directors of the Borden Condenseid Milk Com- 
ranv. I have never had anv communications with the: officers or 
directors of the Sheffield Company. The only member of the 
Oonsolidated Milk Exchange that I know is T. 0. Smith. In 
regard to the protective association I understood the purpose and 
existence of the association was in reference to having certain 
bills passed by the Legislature. I heard something abont our 
company paying $500 to them, but I don't know what it was 
for. I heard about the campaign of education mentioneid in the 
committee of the board of directors. It was a proposition to 
educate the people as to the advantage of having good milk smd 
the extra cost incurred in delivering such milk and the necessity 
of giving a higher price. It was turned down flat. They didn't 
believe in spending money. In regard to the $500^ which we 
paid the protective association, I didn't investigate the people 
it went to nor the reason why it was paid, but I don't think after 
your information that I would let it happen again. 

Isaac Posnee, Grocer: 

I am in the grocery business at 57 East jSTinety-eighth street. 
I sell milk. I get my milk from Liebermann Dairy. Miller came 
to me and said if I would take milk from him he would sell it to 
me ten cents cheaper than Liebermann. Then I took from Miller 
about two months. Then BlefFord came to me and said he had a 
farm and he would sell milk to me at forty cents cheaper than 
9 



2'58 [SOENATE 

anybody or $1.80. I took two cans from Blefford and two cans 
from Miller. Sometimes over two cans. Then I stopped Blefford 
and took all from Miller as some people say Blefford's milk is 
bad. Finally Liebermann came to me and sold me milk ten cents 
cheaper. Then I took from Liebermann. Blefford came and said 
that the man was a collector of the Retail Milk Dealers' Protec- 
tive Association. I heard that Miller's horses were poisoned by 
the asiSO'ciation. 

Heney Rauch: 

I reside at 1283 Hancock street^ Brooklyn, and am in the milk 
business under the name, " Henry Rauch Co.," principal office, 27 
Garden street. I am the president. Mr. F. H. Hueg is vice- 
president; Mr. Gruehn, the secretary. W© are capitalized at 
$45,000, all common stock. I own pretty near all the stock. The 
stock was issued for property. It is a I^ew York corporation, 
organized three years ago. I was in the milk business thirty-two 
years previous to that. The first year we paid 12 per cent, divi- 
dends ; the first part of the second year we paid 12 per cent, divi- 
dends; and the last j)art of the second year we paid 6 per cent, 
dividends; last year, we didn't pay anything. W© draw a portion 
of the profits of the corporation in salaries. I have not increased 
the salaries since the corporation was organized. I have no branch 
stores. I have creameries in the country; one at Bridgeville, 
'N, J., Willawanna, Pa., Apalache, Cortland and East Homer, 
]^. Y. I sell all my milk in 'Ne\v York. I was a stock- 
holder in the Milk Exchange, Limited, owning five shares. I was 
never an officer or director of the Limited. About the same mem- 
bers composed the Consolidated that composed the Limited. The 
five shares were transferred to the Consolidated Exchange. I 
boought my stock in the Consolidated. I have never been an offi- 
cer or director of the Consolidated. I think I attended one stock- 
holders' meeting of the Consolidated. I used to attend meetings 
of- a creamery insurance and their meetings were held after the 
meetings of the Exchange, and sometimes I went in and they 
didn't object to me. There is no difference in the business done 
by the Milk Exchange, Limited, and the Consolidated Milk Ex- 
change, just the same business exactly. The old Milk Exchange, 
Limited, fixed the price or value of milk and the Consolidated does 



Ko. 45.] 2.'59 : 

the same thing. I would describe the Consolidated as simply a 
continuation of the old Exchange. I found out the price that was 
placed wpon milk by the Consolidated through the country papers 
and a postal card from the " Milk Reporter." Regarding the uses 
of -the price fixed by the Consolidated, I would say that we had an 
equal price to buy and sell on ; before the Milk Exchange started 
we had an awful trouble with the prices of milk. At that time a 
good many farmers were shipping in and they wasn't on the same 
standard as now where all the creameries are. At that time 
Orange county was about the farthest district where we drawed 
milk from, and every farmer came down every half month or 
month to collect his bill; then he brought his bill along and he 
says this is the price of milk, and whenever Ave paid this price, 
another one claimed this is the price of milk, and there was maybe 
three or four different prices all round, and sometimes it hap- 
pened that one farmer came down and we told him that this is 
the price of milk .and we paid him, and he came back the next 
month, he came down and he said, '^ You didn't pay me enough. 
I got to have a quarter of a cent more " and I had to pay it out 
of my own pockets, and there was a mix-up all the way around ; 
so they came to the conclusion to come to one standard price and 
they organized the Milk Exchange so that we would go by it and 
the farmers should go by it and we can buy and sell, we can have 
an equal price, a benefit to both parties. That was intended at 
that time, that for the farmers should take about half of the stock 
of the Milk Exchange, so both parties had something to say about 
the price, so that there would be no fighting. But some of the 
farmers didn't take stock, and others — you know what the 
farmers are — they refused to give out any money and when the 
other farmers found out that there was only a few taking stock, 
maybe some of them needed a little money there at that time, 
they sold out, they came right to the creamery, me there, and 
offered their stock, and I suppose they took it up again. That is 
where it comes to, that it is only maybe two or three farmers 
now or countrymen who owns stock in the company. Of course, 
they have no benefit from it there; the money is lying idle; there 
is no money benefit to it. All they can pay, $2 assessment every 
year. I buy some on the Exchange price because the farmers ask 
me to adopt it. I have been offering Borden's prices and they 



M'O [Senate 

refused to take Borden's price ; they* wanted the Exchange prices. 
I subscribe to the " Milk Eeporter '' and I think I pay twenty-five 
cents extra for the postal card. If the Milk Exchange meets one 
day, we generally get the price the next day after, through the 
postal. I do not know of any agreement among the members of 
the Consolidated to maintain or pay the price fixed by the board 
of directors. The reason most of the meimbers pay the Exchange 
price was because it gets published in all the papers and they are 
all governed by that. It is my opinion that when the Consolidated 
Milk Exchange establishes a price and that price is published in 
the paper that it affects a great majority of the trade and they 
come to that price and expect to buy or sell on that price. I am 
selling bottle milk now at eight cents just the same as before. I 
sell dip milk at from six cents to six and one-quarter cents a quart 
wholesale. I sell about 3,000 quarts of bottle milk and about 150 
forty-quart cans of dip milk. I do not lose money by selling 
bottle milk at eight cents a quart. I am making the business pay. 
There is a great flush of 'milk in the market at present. I did not 
raise my price in 1907. I managed to make a living without rais- 
ing it. I think I paid Exchange prices during 1907, 1908 and 
1909. Yes, I remember a man named Gorman, coming around 
selling books. He also wanted to start a so-called campaign of 
education. I paid no attention to it. I am not a stockholder in 
the Dairymen's Manufacturing Co. John Walsh and a man 
named Sidney Bell collect my cans. Bell lives in Jersey. I paid 
these men about $5 a year. EoUowing is my method of handling 
milk from the time I receive it from the farmer until I deliver 
it to the consumer here in the city: When I get the milk in cans 
— just now they bring it once a day, they have to cool the night's 
milk and then bring it. Some of them haven't properly the water, 
satisfactory water, to cool it and keep it over night, they have to 
come twice a day during the summer. 'Now when they bring in, 
the milk, it is received by men at the creameries ; it is measured. 
From there it goes into the receiving vat, strained and goes in the 
receiving vat. From the receiving vat, I pump it up to a cooler, 
pipe cooler, the upper part going to well water and the lower 
part ice water, cool it right down to about forty or thirty-eight. 
Then my milk is ready to ship, whatever I want to ship or bottle, 



'No, 45.] 261 

that is to be shijiped in cans or bottled, and the rest is run through 
the separator and make butter and cheese, either make full cream 
cheese, half cream cheese, sweet butter, salt butter, pot cheese; 
whatever the demand is in the market. 

After that is cooled, then I put it in the bottle filler and then 
it is strained again through cotton; all the milk gets strained 
through cheese cloth and cotton so everything is taken out and it 
goes in the bottle filler and is bottled and capped and with the 
slips on, the date one, and ice up and put in the cases and put it 
in the cars and ship it. When it arrives on the platform here in 
Hew York city, I have my wagons over there to load it up and 
bring it right over to my place. Each wagon should take about 
250 to 300 quarts on a good route. I can make a* little money at 
eight cents a quart bottle milk, when each wagon takes out from 
250 to 300 quarts. In order for a wagon to be profitable, I should 
say that it could not deliver less than 200 quarts. 

James C. Ridek: 

I reside at Central Valley, ^. Y., forty-seven miles froui 
Jersey City. I own a farn;. I produce milk in a small way. I 
have been in the milk business since 1876 as a milk dealer. My 
principal place of business is located at 102 formal avenue, Green- 
point, Brooklyn. I am in business under the name of James C. 
Rider & Co., incorporated under the laws of Xew York. We 
were originally $6,000 capital stock. About two years ago, our 
capitalization was increased to $24,000. I am president of the 
corporation. We have not paid any dividends in the last three 
years. I own the majority of the stock. I have a creamery at 
Bridgewater, J^. Y. I sell my milk in Xew York. I pre- 
sume I was a stockholder in the Milk Exchange, Limited. I am 
a stockholder in the Consolidated Milk Exchange. I own six 
shares. I do not remember how many I had in the old Exchange. 
I have never been an officer, director or stockholder in Borden's, 
Sheffield Farms or the Mutual Company. I have never owned 
any stock. I have attended stockholders' meetings of the Con- 
solidated Milk Exchange. I have attended at Harrison street 
and Jersey City. In the old Exchange, we bought milk through 
them : with the new Exchange, we have not. That is the differ- 
ence in the business. The Milk Exchange, Limited, fixed or 



2'62 [SiENATE 

found the values of milkj just the same as the Consolidated Milk 
Exchange does at the present time. The Consolidated Milk Ex- 
change is beneficial to me because it establishes a price which gov- 
erns the market, that and the Borden price. So far as I am able 
to tell, they average about the same within the past two or three 
years. At those meetings, men meet and discuss the value of 
milk, the value of butter, the A^alue of cheese, and by-products, 
and in that way, come to a conclusion what a quart of milk is 
worth. The dealers usually give an idea of what surplus or 
scarcity there is, whichever there may be in their locality ; and 
from that the c-onclusion is drawn that a quart of milk is worth 
so much money. I have heard considerable discussion here be- 
tween the counsel — I a,m surprised at the attitude that the coun- 
sel and the whole thing has seemed to be taking on. It isn't 
pleasing to me. I believed that this business was to better the 
condition of the milk business for the people and for the dealer ; 
and from what I have seen and heard this morning, it seems to 
be entirely antagonistic to that point. 'Now I don't feel that we 
could do business without the " Milk Reporter." I don't feel that 
we could do business without the milk cards that the " Reporter " 
issues. I receive the cards. It gives me a broader idea — that 
is, it gives the people that advantage and opportunity of inform- 
ing themselves if they want to. ISTow, I recommend it to my farm- 
ers and they are pleased to get it. I am pleased to put the '' Milk 
Reporter " in every farmer's hands that I can, just as much as the 
machinist is to put the ^^ Scientific American " in the machinist's 
hands. I think the " Milk Reporter " is just as much use. I don't 
know a man on the staff of the '^ Milk Repoi'ter," but I have a 
little '' Milk Reporter " in my pocket at home, I think pub- 
lished in 1876, when we gave a man a few dollars to go around 
and investigate the condition of the market, and just as you have 
been informed here this morning, this man would say I am paying 
so and so. I am paying so and so. And it was just simply a 
continual unsettled condition of the market and law suits all the 
time. Some of the people are older than you are and possibly 
older than I am could give a great deal better idea of that than I 
have given to you. Well now, the " Milk Reporter " has certainly 
overcome a good many of those little things. They carry into the 



No. 45.] 263 

home and into the families the condition of the market, and I do 
not think that we could very well get along without just the mem- 
orandum that we have. By memorandum, I mean the '^ Milk Re- 
porter '' and the card. They publish the price established by the 
Milk Exchange. I am quite sure that when I see the price in 
the '' Milk Reporter " that it is correct and the valuation that the 
Milk Exchange has established. The board of directors of the 
Consolidated Milk Exchange is composed largely of dealers in 
milk, but I want to say right there that the stock was oifere^t to 
the farmers just as much as to the dealers. I think the reason 
the farmers dropped out and that there are very few farmers on 
the board of directors now is largely due to the farmer's per- 
fect confidence in the dealers. I think it would be a good plan 
for all the milk coming into I^ew York to be under one manage- 
ment, and that management under strict State supervision. I am 
losing money at the eight-cent price. I did not raise the price 
on I^ovember 1st and if the eight-cent rate was continued 
throughout the year, I would make enough in the months when 
milk was cheap so that I would realize a fair profit on the in- 
vestment. I sell about 2,000 bottles of milk a day at the pres- 
ent. That is all put out at seven and one-half cents and eight 
cents a bottle. I did not hear of any meeting of the board of 
directors of the 'Consolidated Milk Exchange that was to con- 
sider the advisability of recommending the raising of the price 
to the consumer. I know some of the milk dealers held some 
meetings in Williamsburg. I do not know who was present. 
Those meetings were called in reference to the raising of the 
price of milk. I thinly one of my cousins went to one of them, 
either George or Samuel Rider. Mr. Wierk talked with me over 
the telephone. He said he thought the price of milk ought to be 
raised from eight cents to nine cents a quart. I told him at the 
time I thought we ought to. He said that all of the others were 
going to raise the price to nine cents. By ^' the others," I mean 
the Milk Exchange. I don't think the dealers in Greenpoint 
wanted to raise the price to nine cents — I am not speaking of 
the little stores, but I mean two of the large dealers — what you 
might call our competitors. I met Mr. Wierk and the superin- 
tendent of the 'New York Dairy Produce Company, Mr. Oher, 



2'64 [(Senate 

and discussed the advisability of advancing the price tO' nine 
cents. I thought that it ought to be done. I heard from Mr. 
Beakes about this time and he thought the price ought to be ad- 
vanced. He quoted the prices that we were paying for milk and 
said that we were losing money and all that. He thought that 
we ought to get together and raise the price. 

William E. Rogers : 

I reside at 44 Clifton j)lacej Brooklyn. I have been in the 
milk business about twenty years. I am president of the Diamond 
Dairy Company. Also a director. I think it was organized 
about ten years ago under the laws of the State of ISTew York with 
a capital stock of $12'0y0'00. C. A. Wickes is vice-president, I. 
V. Ketchum, treasurer, and H. S. Hanna, secretary. G. H. l^ie- 
meyer, I. Y. Ketchum, M. F. Rogers and George C. Rogers are 
directors. I own 142 shares of stock of the par value of $100 
each. It is a close corporation. We have not paid any dividends. 
I receive $25 a week plus 5 per cent, of the par value of the stock 
that I own. Sometimes we made improvements and didn't take 
out the 5 per cent. We own three creameries in the country. 
They are in Susquehanna county Pennsylvania. We have one 
in Sussex county, 'New York. We have some branch stores in 
New York city, borough of Brooklyn, at 795 Seventh avenue, 344 
Seventh avenue, 86 Butler street, 630' Fulton street, 1152 Bed- 
ford avenue, 487 E^ostrand avenue and 185 Ralph avenue. Our 
main business is bringing the milk from the creameries and selling 
it in the borough of Brooklyn. I am a stockholder in the Con- 
solidated Milk Exchange. I own five shares of the stock person- 
ally. I suppose I bought them ten or fifteen years ago. I was 
not a stockholder of the old Milk Exchange. I am one of the 
directors of the Consolidated at present. Have been for less than 
two years. I don't own stock in Bordens, Sheffield or the Mutual 
Company. I was an employee of Sheffield Farms about twenty 
years ago. We have done a little business with Sheffield Com- 
pany. We buy or sell to them occasionally in case either of us are 
short. Perhaps about half the time. When it is possible I at- 
tend the meetings of the board of directors of the Consolidated. 
When they fix the value they consider the weather, the supply — • 
whether the city is filled with milk or whether there is a lot of 



^o. 45.] 265 

goods held back in the country, also the butter and cheese .prices 
and anything else that might tend to influence the price or value. 
There are ^ve shares of stock still standing in the name of Wil- 
liam E. E,ogers & Company, with whom the Diamond Dairy 
Company consolidated six years ago. The meetings of the Con- 
solidated were usually held in Jersey City and at G Harrison 
street. The Consolidated Milk Exchange has no dealings in milk 
that I know of. They consider the value of milk and take up 
the question of collecting cans and legislation. When this value 
was placed each one casts a ballot as to what he thinks the value 
of milk should be, and these are counted and each one is asked 
for his reason for thinking it should be so much, and after this 
is done a formal ballot is taken and those are counted, and the 
value of milk is placed in accordance with the majority of the 
formal ballot that decided for any one figure, and the chairman 
of the meeting made an announcement of that formal ballot as 
follows : '^ The committee finds in their judgment the value of 
milk to be so much for a forty-quart can, with the allowances." I 
know the " Milk Reporter " published the value. It was headed 
'^ Milk Exchange prices." That gives us an idea of how the 
situation is. It enabled us to fix our prices to the farmer. We 
think the information gathered is very valuable. It makes quite 
a difference if there is plenty of milk coming in or if there is 
plenty back in the country or if butter and cheese is high, and 
whether it is dry in the country or very good pasture. When I 
attend these meetings I go as much for the information that I 
get in regard to the situation in the country as I do for the value 
they place there. I suppose that the value placed on milk would 
influence us in the price we had to pay to the farmer. In buying 
milk in the country I don't always establish the price that cor- 
responds with the value found by the Exchange, but do somcr 
times. The competition in the vicinity of my creameries controls 
the price. Some of the competing creameries are owned by 
members of the Exchange and some are not. After the valuation 
changes on the Exchange and we conclude to change the price to 
the farmers at all at that season, we do it then. I think this 
practice is followed in the majority of our creameries. Our 
method of changing the price at the creameries is to write a 



2'66 [S'ENATE 

letter to post up a card giving the new price until further notice. 
We haven't made any changes in the price at the creameries in the 
last month. Don't remember v^hen w^e did make any changes in 
the price. It is not our practice to change the price to the farmers 
corresponding to the valuation fixed by tho Exchange nor to 
buy milk as low as the values found hj the Consolidated Milk 
Exchange. We try to buy milk as low as we can. But we couldn't 
always buy it at any figure, it would depend on our com2>etition 
in the neighboring creameries, and I am not paying now prac- 
tically the value that the Exchange places on milk. We are pay- 
ing more than the Exchange price. I think I am paying about 
ten or seven cents a can more for the far off milk than the Ex- 
change valuation, and about the same as the Exchange price for 
the nearby milk. We pay the farmer $1.77 per can, furnish cans, 
wash them and pay all the freight. That price is net to the 
farmer. I have never seen the articles of incorporation of the 
Consolidated Milk Exchange. 

Q. And the object then, as you understand it, of the Con- 
solidated Milk Exchange is to have a uniform value placed upon 
milk; is that it? A. Yes, sir. 

Q. And it is supposed that this uniform value that they place 
upon milk will be generally paid to the producers for milk at the 
time or about the time that it is placed on it? A. I don't know. 

Q. It is generally supposed ? A. I don't know. We don't pay 
the same even at our places. Our prices differ from the Exchange 
prices at different times. 

Q. But take the general average throughout the year, aren't 
they about the same, the values that you place and the values 
established hj the Consolidated Milk Exchange? I^ow, I do 
not want to influence you into saying it. I want to get the fact, 
Mr. Rogers. Aren't they about the same? I don't want you 
to say it to satisfy me, but I want to get the fact. A. 'No, sir, 
they are not. 

Q. They are not? A. Ko, sir. There was no method that I 
know of of notifying the members of the resolution passed by the 
directors. I never saw any reporters present at the meeting, but 
they wait around until after the meeting. I think the reporters 
sometimes come to the door and ask the officers what has been 



No. 45.] 267 

done and the officers tell them whatever value they have found. 
I know Mr. Stanton, the publisher of the '' Milk Keporter/' and 
I have seen him at the meetings, and I think he would have the 
privilege of the room if he was there. I never saw him but once 
or twice. AYhile I w^as a member of the Exchange the price to 
the consumer was never discussed, and no regulation as far as 
I know was ever established to bind members to observe th© 
values found by the Exchange nor was there any regmlation that 
influences the members to observe the values found by the Ex- 
change. The only thing that influenced us was the statements 
received from the country. That influenced the directors in ar- 
riving at values. I raised the price from eight to nine cents for 
bottled milk E^ovember 4th. My business is about half in bottled 
and half in dipped milk. I handle about 6,000 bottles per day. 
About the same of dipped milk, and I advanced it about one- 
half cent a quart at the same time. We change the price for 
dipped milk according as the price changes to the farmers in the 
country. I think our price for dipped milk is six or six- and one- 
quarter or six and one-half cents. I discussed the advisability 
or necessity of raising the price with some of my dealers at 
different times and different places. Any time that I might meet 
them. It was a question of getting more money or some of us 
having to go out of business soon. 

Q. Was not the question of agreement to advance the price 
discussed with you ? A. ISTo, sir. Some subject might have been 
discussed at the Consolidated Milk Exchange after the meeting. 
I don't remember that it was discussed after a meeting held in 
October, 1909, nor I don't recall that I was present. There was 
no discussion while I was there. 'No discussion took j)lace during 
the meeting. There might have been a general talk in a general 
way after the meeting about the advisability and necessity of 
raising the price. I would not say that at the meeting on the 
30th day of October, 1909, other dealers didn't say to me that 
they intended to raise the price about ^N^ovember 1st. I have 
never attended any gathering or meeting at which it was gen- 
erally agreed that the price of milk should be advanced on or 
about November 1st. Several gentlemen called upon us from 
different newspapers alx)ut a campaign of e<lucation, we are to 



2-68 [S'ENATE 

insert a car in a paper and ^' they were going to write np a 
lot of other matter." N^either the Borclens, 'Sheffield or the Mntual 
own any stock in the Diamond Dairy Company, and I am a 
member of the Mutual Aid Society. I have never been an officer 
or director of the Dairymen's Manufacturing Company, and I 
have never been a member of any committee of the Exchange. 
I don't know that there is any committee on price and sales in 
the Exchange. The price or value made by the Exchange might 
to some degree affect the price in the country. 

William J. Rogers : 

I have resided in Orange, N. J., for fifteen or eighteen years. 
Except the former president, now dead, I know none of the officers, 
directors or stockholders of the Sheffield Farms Slawson-Decker 
Company, nor have I ever had any communication with any officer, 
director or representative of that company in any manner, shape 
or form. I have been president of the Borden Condensed Milk 
Company since 1901. M^ company advanced the price of bottle 
milk frotm eight cents to nine cents a quart about November 1st. 
Except with Mr. Taylor and one or two others of our company, 
I had no discussion with anybody else about the matter of ad- 
vancing the price. I talked with Mr. Cochran, of our Route de- 
partment, and we determined to advance the price on E^ov ember 
1st. We took every precaution that our intentions should not 
become known to others. In our notice we gave no reasons for 
the advance, but simply stated that until further notice, ^^ milk 
would be nine cents a bottle." The object of the notice was '^ to 
give the customers an opportunity to change if they did not choose 
to pay the advanced price." I consulted with no one except Mr. 
Cochran and Mr. Taylor of our company in reference to the ad- 
vance in price. We consulted with no one. It would not make 
a particle of difference what others did. We gave the question 
of others raising the price no consideration. We have only one 
price — no graded prices like some others have. I know none of 
the officers or directors of the Mutual Milk & Cream Company. 

Q. Will you tell us, Mr. Rogers, how you make the prices that 
your company will pay the producers for milk ? A. We have 
a system of contract. There are two periods. That is 
the spring and winter contract. The first thing we do 



'No. 45.] 269 

is to send out to the superintendents a blank asking them to re- 
port the quantity of milk they can buy at their stations, their 
present dairy, and to also advise us as to what they can get in 
addition to their present dairy. We then ask their recommenda- 
tions as to what price it would be nece&sary to pay in order to 
secure that quantity of milk. That is the first move. Xow, after 
a while we get those reports all in and when we receive those 
reports then we get together, the officers get together — the execu- 
tive officers — and discuss the situation. We study it not from 
the standpoint of the locrd superintendent but from the broader 
gauge, itaking the condition all o^'er the State and country. The 
prices of butter, price of chee^p, price of feed, prices of various 
feeds, whether they have advanced or not, and whether the butter 
and cheese prices were stiffening up. Then we discuss that and 
conclude what would be a fair price to offer the dairymen for 
their product. That having been done, we send out a notice to the 
superintendent giving him the quantity we allotted to the various 
plants, the quantities they are to buy. We send a letter to 
the various superintendents giving their allotments, a certain num- 
ber of pounds of milk each month in the six months at the follow- 
ing prices— at the prices you will find inclosed on a slip in the 
envelope. Instructions are given not to open that envelope until 
the morning of the contraet. That is, we will say, the 15th of 
September, so the dairymen themselves will come in, and that 
is the day they receive their checks. On the 15th of September, 
the superintendent is supposed to open that envelope showing the 
prices, and on the back of it he indorses, " opened such and such 
a day " and that is witnessed by one of the factory men. So we 
have the two signatures showing that the envelope was not opened 
until the instructions said to. Then they paste the prices up on 
the bulletin showing what the prices are, so the farmers can 
come in and see what the prices we offer are for six months, and 
it gives them a chance to discuss it among themselves before 
sig'ning it. That closes that. 

(Form of contract offered in evidence, marked Exhibit No. 
1, of February 9th.) 

(Various exhibits received showing the method Bordens employ 
in doing busine&s with the farmers.) 



2Y0 [Senate 

We took the Exchange price into consideration with other 
things in arriving at a price that we paid for milk. " Our prices 
have always been higiier than theirs, except perhaps when there 
was a shortage of milk." They ean change their price from day 
to day. Ours is a contract price for six months. Their price 
for same period may average up, '^ but you see the conditions 
are a little different. To give- you an illustration: Especially 
in August, and I think September, there was a great shortage of 
milk. Their prices were higher than ours then. We felt the 
shortage as much as they did, but Ave could not change our prices." 
At the present time their prices are considerably lower than ours 
because we put ours out so much in advance. In October, 1908, 
we paid $1.Y0 per 40^quart can and $1.90 in October, 1909. We 
paid a very small percentage on an average less for milk in 1900 
than we did in 1908. One dollar and sixty eents and one-half 
per 4'0-quart can in 1909 and $1.61 in 1908. We passed no reso- 
lution by the board of directors when we advanced the price on 
l^ovember 1st. I never attended a meeting for the purpose of 
considering the advisability or necessity of advancing the price 
of bottle milk with Mr. Leton Horton or Mr. C. H. C. Beakes. 
I never consulted with anybody about it. 

Q. I^or authorized anybody else to discuss it with them ? 
A. Positively. I know some of the members of the Consolidated 
Milk Exchange and Mfi\ Comfort called on me in August or Sep^ 
temJber and talked with me about " the foolishness of the Exchange 
ill putting up prices to the producer," and talked on the general 
milk business. 

Q. Did he say anything to you about the necessity or advisa- 
bility of raising the price of bottled milk ? A. E^othing whatever. 

Q. Didn't he say the consumers ought to pay more for milk ? 
A. I think if he said anything at all it was the other way; he 
hoped prices would not go up. 

Q. To the consumer ? A,. Yes. 

Q. Is that the last time you saw Comfort ? A. The only time 
I saw him. I never heard of the Milk Dealers' Protective Asso- 
ciation until now. We have a department that attends to our 
collection of cans. There is an association that brings our cans 
to us. It is called the Can Dealers' Protective Association, I 



:^o. 46.] 2'71 

think. We have no representative in the Milk Dealers' Pro 
tective Association. We have about 70 or 80' stations. We use 
sej)arators or substitutes for them in nearly all of them. We use 
separators entirely for filtering milk. By a separator, from the 
centrifugal force, the cream is separated from the milk. We have 
another method that is better than a separator, simply a filtering 
apparatus, a filtering through cotton. We do not use separators 
for standardizing milk and have not, during the history of our 
company. We have no grades of milk. ^' Our milk is precisely 
as the cow gives the milk." We sometimes give premiums for 
a high percentage of butter fat. We do that to keep our dairies 
from going to the butter factories. The proper way to buy milk 
is on the butter fat test. We give the premium only where there 
is competition with the butter factories. We never make butter 
except when forced to on account of a flush of m,ilk. The more 
butter fat in milk, the more cream we get and from some of our 
creameries, we ship only cream. Butter fat runs high in the 
winter months. We do not take into account what was made or 
lost in the previous six months in making the price to the f armeirs. 
We only take into account the period for which the contract is 
made. The figures maide for Mr. Scudder on the profits for the 
year ending June 30, 1909, compared with June 30, 1908, were 
mere estimates, showing $170,000' more profit in 1909 than in 
1908. There is no w.ay of separating the profits of buttermilk 
from the rest of the business. The figures Mr. Scudder got are 
only an estimate, '' a calculation." I don't think that our profits 
and losses should be taken into account in arriving at a price to 
the consumer. • We have to buy an excess of milk in summer to 
get what we require in winter and we have to manufacture miucli 
of the surplus into butter, on which there is frequently a loss and 
the price to the consumer does not fluctuate as does the price to 
the farmer. When we are buying it cheap of the farmer, we do 
not sell it correspondingly lower to the consumer — there are 
many things to take into account and we try to average up the 
year. With reference to the $15,428,408.46 of the capital stock 
issued for trade-marks, patents and good will, I would say that 
that stock was issued for full value. We have to take into ac- 
count the 50 years' experience of the parent company, the Kew 



272 [Senate 

York Condensed Milk Company, whicli was capitalized at $3,000- 
000. All the tangible assets of that company were turned over 
for $4,070,591.54, and the balance was good will, patents, trade- 
marks, etc. '^ I would rather take the good will of the company 
to-day than all the assets (tangiible).'' We have 261 trade-marks 
throughont the world, some eighteen pending at present, and 
thirty patents. The company's name is known all over the world. 
In 19'0'2, the company bought out the Anglo-Swiss Company. It 
did principally a manufacturing business. They had over in 
Brooklyn, ^' some broken down old teams and horses and wagons. 
I guess they ran about twenty." We have bought no other com- 
panies. ■ i i ''i M 

Q. iSo no milk is sold by your company after it is forty-eight 
hours old ? A. 'No' ; positively, no. The cream is not held over 
twenty-four hours. Our concern holds no cream for any great 
length of time. It is miore expensive all the way through to 
bottle milk in the country. There is the freight and the trucking 
— both more expensive on bottled milk — and another diif erence 
in the matter of cost of bottling in the city or country. Our 
system of inspection is very expensive. We have seven veteri- 
narians constantly in our employ and an inspector for each sta- 
tion. Packing the boxes of bottle milk is an additional expense 
and the four-horse team handles less than onerhalf in bottle milk 
than it can in forty-quart cans. The principal reason why we 
bottle in the country is the deterioration incident to sending milk 
in bulk. We send as much by carload lots as we can in order to 
save 12% per cent, freight. Whenever we learn that there is an 
epidemic, or a case of typhoid fever in the family of the pro- 
ducer, we shut off that dairy and pay for the milk just the same. 

Q. All your milk is siubmitted to the tubercular test ? 
A. Physical examination we depend on entirely. I do not be- 
lieve in the tubercular test as applied. I was a driver a great 
many years ago and knew Joe Perris. I have seen him in the 
intervening years. He was selling goods for a wholesale liquor 
house. When I met him some time ago, in the course of conversa- 
tion, T may have said to him, '^ You know there is no combina- 
tipn." I would not repeat what he sai'd — ^^ he said too much — 
I left him standing in the street talking." There are no minutes 



:N'o. 45.] 2'73 

of our corporations of meetings held, in which the question of ad- 
visability or necessity of raising the price of milk was expressed 
or discussed. The telegram sent to Mr. Taylor by me had nothing 
to do with the matter of raising the price of milk at all on ISTo- 
vember 1st. I never heard anything about the campaign of 
education to raise the price of milk until I saw it in the news- 
papers. I never heard of Mr. Gorman. I think that a farmer 
carrying on his business systematically can produce milk at a 
reasonable profit and this does not apply to the shiftless dairy- 
man. The farms have been abandoned and you can buy them for 
w^hat it cost to build the buildings. We are trying to demonstrate 
to farmers that with a business management and the same system 
that we employ in our country end of the business, they can make 
money. A man will remonstrate over paying one cent advance 
in the price of milk for his family where he will not question 
the price charged for a glass of wine. When a farmer brings 
his milk to our creameries, he knows what the price will be for 
six months. " He regulates the production according to these 
prices. If he has not got cows enough in his dairy, he will buy 
more cows.'' He should not buy cows, he should raise them on 
his own farm, and he should raise his own grain and not pay the 
high prices exacted. A farmer should keep an accurate reeord of 
all expense. It is the only way he can demonstrate what can be 
done on a farm. The farmer has got to be educated. Something 
has got to be done. ^^ Otherwise the city will go without milk, 
as w^e can show by records the falling off is great in the produc- 
tion of milk in this State. That is the reason why we have 
to q:o 250 and 300 miles from ^ew York to a'et a suffi- 
cient amount of milk." During the months of August and 
September, there is a great scarcity of milk. ^' AVe our- 
selves were as high as 50,000 quarts a day behind what the 
consumer required, and we issued instructions to the superin- 
tendents to notify the drivers that they mnst give the children 
in all cases the preference where there was not enough to go 
around." The production of milk at eaeh dairy falls off every 
year as far as our dairies are concerned, -and we think that it 
shows up better in our case than in others. Our farms have 
fallen from one hundred and forty-one to one hundred and nine 



274 [Senate 

quarts on an average per day. This is due not only to the board of 
health regulations hut to our restrictions — our sanitary and venti- 
lation and other requirements are rigid. When we v\^ent to Chi- 
cago the drinking of milk had been abandoned. They v^ere buying 
milk at five cents or six cents a quart. " We re-established the 
route system, and even in the best sections it was hard to con- 
vince them that seven cents was a reasonable price for milk. 
"Those conditions have all changed." Milk is drunk everywhere 
there now. Our price in Chicago is eight cents a quart. The 
difference in price between Chicago and 'New York is represented 
by the conditions. " They farm out there. Here they do not pre- 
tend to farm. A dairyman buys his cows, buys his feed and he 
hires his labor here. But there there are different conditions. 
They raise their cows, they raise their feed, and the result is that 
they pay less for milk there." Milk costs less and we sell it for 
Jess. In Chicago, we only have to go about fifty miles ; here we 
go 300 miles for milk. The reason little milk is produced near 
!N'ew York is because the farms have been turned into building 
lots and the homes of gentlemen. I think the freight rates are 
all right as they exist to-day. The proper time to bring milk iii 
is the night time, not in the day as formerly. 

^Exhibits received and description of inspection made.) 
Henry H. Rogers bought stock in our company the same as 
any other investor. I know no one connected with the Standard 
Oil Company, except Mr. Tilford, now dead. We sell about 68 
per cent, of all the milk bottled in the country and about 21 per 
cent, of the entire amount of milk of all kinds is sold in New 
York city. As to whether I can say anything that would assist 
this inquiry, I have only to say that we are in a class by our- 
selves. We are not brought in touch with any other dealers in 
any way, shape or manner. We have only one regular price. We 
do not have, like some dealers, eight-cent, ten-cent, fifteen-cent, 
and twenty-cent milk. The price is all the same. We have no 
competitor in milk bottled in the country. I would not caro to be 
understood that we have no^ competitors. There is the strongest 
kind of competition ; there is just as much difference in the quality 
of milk as there is in almost anything produced. 



'No. 45.] 275 

Q. How do you account for the simultaneous raise in price by 
all dealers about November first? A. I think everybody wanted 
to put up the price of milk. Do not think there is any question 
about that. I speak from experience, from the fact that there was 
the same thing out west. We exercised the same caution there 
the time we put up the price in 1907. We put the price there, 
and it is a strange thing we did the same as we did in this case, 
and it was brought out there in the evidence by the competing 
companies when asked how they came to j^ut up the price, they 
found that Borden's had put up the price and they had to or go 
to the wall. How they got the information: A driver called in, 
and immediately they got out a notice, some of them in fact took 
our exact notification, the only change was to put a different name 
at the bottom, and some of them worked Sunday in order to get 
them out for Monday, some did not get them out until Tuesday. 

If our competitors have any system of keeping accounts, they 
knew it cost onc^fifth-cent a quart more in October to deliver per 
bottle than they received. We took and added that to our No- 
vember cost and found it would cost us .086 3 to deliver bottled 
milk in the month of I^ovember. Xow, as a matter of fact we 
found it did cost us about that. It cost .0803. It cost in De- 
cember .0882 and our officers took this into account and we ad- 
vanced the price. 

Q. Is it fair to conclude that the other dealers followeel your 
price ? A. I think there is no question about it. I think some 
hesitated to put u]3 their 2>rice and some did not. Quite a number 
did not put up their price. I think it is in evidence that they 
did not put up the price because they thought it was a good op- 
portunity to steal customers. 

Q. Do you. find competition in nearly all your stations ? 
A. Most decidedly. I would like to show you a map where the 
plants are located. 

Q. You find several competitors at nearly every station* 
A. Every station, yes, sir. We think that farmers prosper under 
our regulation. 

Q. Would you say that practically the only function of the 
Consolidated Milk Exchange was to regulate the supply in the 
seasons of a shortage of milk ? 



276 [Senate 

Q. That is, lower their price when milk is flush and raise when 
milk here is scarce ? A. I think so. I really do no't know much 
aibout it. I think the reason they come together is for the purpose 
of regulating the milk question. In other words, it is a sort of an 
association of milkmen, or the farmers originally started it for 
the purpose of the farmers' end, but it got mixed up with the city 
end, and I don't laiow which controls. 

Q. You are coinpetitors in the country with them for jnilk ? 
A. Yes. As a matter of opinion, I will state that there is the 
strongest kind of competition with the exchange. The individual 
buyer or bottle manufacturer, there is the strongest kind of com- 
petition. A^rhen it comes to the city, there is the strongest kind 
of competition. The system of selling milk by large dealers is 
such that it is up to every driver to get all the busineiss he can get, 
and he has his own story to them, some of them tell stories that 
are not facts. There is the strongest kind of competition. The 
system of standardizing milk on the basis of 3, 3^/2 and 4 per 
cent., and possibly skimmed milk, would leave an opportunity for 
fraud. It is a crime that skimmed milk is not sold in !N^ew York 
city. E^o reason in the world why it should not be sold as skimmed 
milk. There are so many ignorant people that there will be op- 
portunities for fraud even if the different grades were clearly 
marked. I think that skimmed milk would be a great blessing to 
the poor in this city and there is no danger that it would reduce 
the consumption of full cream milk. Skimmed milk is the most 
wholesome food in the world. '^ I would rather feed a child 
skimmed milk than I would Jersey cream that was so excessive 
with butter fats, that it would upset the child's stomach." As to 
putting up the price I^ovember first, I would say that in 1907, we 
raised the price in November to nine cents a quart. We had 
planned to put it up the first of JsTovember or about the first of 
]^ovember. Everybody knows if the price goes up at all, that is 
the time to put it up. Really October is the time it should go 
up. In November, I said to Mr. Taylor " Let the other fellows 
go ahead." We waited until l^ovember 18th and could not stand 
it any longer. We had our notices out about the 18th. We have 
got to conduct our business without regard to anyone else, The 
fact that they follow us we cannot prevent. 



No. 45.] 27: 

Francis B. Sanfoed, Stockholder, Consolidated Milk Exchange: 
I reside at Warwick, X. Y. I am an attorney-at-laWj was 
never in the milk business, but am a stockholder in the Consoli- 
dated Milk Exchange with five shares of stock, which I own about 
two years. I obtained these in exchange lor legal services. I 
think I have two shares of stock in the Mutual Milk & Cream 
Company. I have no interest in any other companies. I pre- 
pared the certificate which was filed in the office of the Secretary 
of State of IN'ew York about three years ago for the Consolidated 
Milk Exchange. I don't know whether the Consolidated Milk 
Exchange was engaged in buying or selling milk. I don't know 
whether there was any arrangement or any rule with reference 
to transmitting the values that its Board of Directors arrived as to 
the '' Milk Reporter." I don't know about any agreement among 
the members of the Consolidated Milk Exchange 2:)revious to 'No- 
vember 1, 1909, to advance the price of bottled milk from eight 
cents to nine cents a quart. The directo-rs of the Consolidated 
Milk Exchange retained me to get up this certificate of authority 
to do business in the State of E^ew York. Mv relations were with 
Mr. Laemmle and Mr. Beakes and Mr. Wright. I put in the 
certificate, the paragraph, '^ That the business or object of said 
corporation which it is engaged in carrying on within the State 
of 'Ne^Y York is the purchase and sale and dealing in milk, cream 
and other dairy products," because it is my understanding that 
you have to put in the certificate that it is or intends to conduct 
business in order to get your permission to do business, and when 
I put the first paragraph in there I expressed as nearly as I was 
able to what I understood they were doing or entitled to do in 
this State. 

Theodore Silber^ Grocer: 

I reside at 99 East 111th street, 'New York. In the gi'ocery 
business and buy my milk from Liebermann. Have been for two 
weeks. Before I bought from Miller Brothers. I bought from 
Miller Brothers about three months. Before that I bought from 
the Hamilton Dairy Company. Miller was selling me milk for 
$2.20 a can. Some time after Miller sold me milk a man came 
around to see me and gave me a card, ^' Milk Dealers' Protective 



278 [Senate 

Association, 62 1 East 12tli street, 'New York City, George W. 
Blefford, Can Collector." He told me he would give me milk for 
$2. I didn't stop taking milk from Miller, but Miller kept rais- 
ing the price and then I stopped. Finally Liebermann came 
around and asked me what I was paying Miller and I told him 
$2.30 and Lieberman said he would sell me milk for $2.20. 

S. Feedekick Tayloe : 

As to the way the price of milk is fixed to the producer by your 
company, would say that the preliminary blank is sent out to 
various superintendents asking them to report approximately the 
amount of milk in sight, and at what price they can probably 
contract for that milk. Those blanks are returned to the office, 
the results tabulated, and the accountant submits it to the officers 
who take into consideration the reports from the various sections 
and the general situation, and determine at about what figure they 
can buy that milk. Then instructions are sent out as outlined and 
set forth in the exhibit already on file. I consult with Mr. Rogers. 
We take into consideration the prices paid by the Consolidated 
Milk Exchange in a general way. We are simply cognizant of 
the fact. We may look over their scale of prices when we are 
fixing our prices for the product we are buying independent of 
them, without any relation to them whatever. The prices estab- 
lished by the Consolidated Milk Exchange and those established 
by our company compare very closely on an average. Ours will 
average higher. We had a discussion among the members of the 
company as to raising the price of milk. We do not discuss our 
business outside of the company. We did not discuss this raising. 
I never met Mr. Beakes. I did not know Mr. Loton Horton. I 
have met Mr. W. B. Conklin of the Consolidated Milk Exchange. 
I saw him six or seven years ago. I know none of the members 
of the Mutual Milk and Cream Company. I do not know any- 
thing about the Milk Dealers Protective Association. I have seen 
separators used in Borden's creameries. They are used for get- 
ting cream and sometimes for clarifying milk. It has never been 
used for standardizing the milk to my knowledge. The reason 
we came to the conclusion to advance the price of milk to nine 
cents was because of the estimates made by the accounting depart- 



:^o. 45.] 2'79 

ment, and knowledge of our high price for fluid milk to the farmer 
for the winter contract. In the route department we sell fluid 
milk, cream, cheese, buttermilk, and condensed milk, and butter, 
you might say, although the latter is sold at a loss, practically. 
Condensed milk was the beginning of this business. We ran 
wagons up to 1887 for delivering condensed milk when we did not 
sell bottled milk at all and it constituted our business. Bottled 
milk was a side issue and at the present it is from the profit 
standpoint. I do not know how long milk is kept but from what 
Mr. Kogers has stated I would say about thirty-six hours. I 
believe a Mr. Gorman came to me some time last winter or spring. 
He had some kind of a newspaper scheme. He wanted some 
money out of the Borden Comj)any. It was some write-up busi- 
ness on the quality of milk, etc. He did not show me any agree- 
ments with the other companies who were going into it. I was 
an officer of the company in 1907 when the price of milk was 
advanced to the consumer. We raised it about the first of ISTovem- 
ber and reduced it about the first of March. The lowering was 
due to the decrease in the consumption, falling off of business. 
My new contracts for six months with the producers are usually 
made the 15th of March. At the time that we raised the price of 
bottled milk from nine to ten cents was never discussed or inti- 
mated or suggested to my knowledge by any one. I only know 
that there is no city in the United States that gets country bottled 
for any less than ten cents. Chicago is an exception because 
Borden is operating there. Large cities usually pay ten and 
tw^elve cents for bottled milk, ^ew York gets a larger supply of 
sanitary bottled milk than any city in the world. Milk bottled 
in the country is bottled under more sanitary conditions and our 
handling of milk is more or less in the open and the people 
understand this and demand bottled milk more than they used to. 

Horace S. Tuthill: 

I reside at 802 West 181st street. I am vice-president and a 
director of the Sheffield Farms-Slawson-Decker Company. I have 
been a director since its incorporation and vice-president ab(3ut 
three years. I have direct charge of our Harlem business where 
we run 117 routes, and a provisional charge over other places. I 



280 [Senate 

am generally in the main office' in the afternoon. As to how we 
arrive at the price to the jDroducer^ I would say that it depends 
on conditions. If it has been short crops this summer, we infer 
feed is going to be high in the following winter and we will have 
to pay liberally to help the farmer out; if he has got to pay high 
prices for feed, he can't make cheap milk. This is arrived at by 
our executive board. Our treasurer and Mr. Van Bomel, the 
superintendent, generally handle that, second vice-president, 
Mr. Halsey. We consult together very frequently because it is an 
important question — what we are going to pay the farmer to 
induce him to make enough milk to see us through. We have to 
establish about the same price as Bordens if we are in a section 
where Borden competition is felt. We have got creameries in 
Fairmount, and we come in contact with the Boston market, and 
there are places we come in contact with the Philadelphia market, 
and we have got to bid up to get the goods. It is a grave question 
to get enough supply. There are times of the year when w^e can't 
get it and have to send our wagons out short. Begarding my first 
obtaining knowledge that the Sheffield Farms Company intended 
to raise the price of household milk from eight cents tO' nine cents 
a quart on ^November 1, 1909, I would say that on (Saturday morn- 
ing, the 30th of October, my son, who has charge of our business 
in the Bronx, had got to his office about half past seven. I was 
about to take breakfast and he called me up and told me that 
Bordens were out with a circular that they were going to raise 
the price to nine cents on Monday morning. Tie asked me vvhat 
I was going to do and I said I didn't know. When I got down 
to my Harlem office, which is at the corner of Manhattan street 
and Broadway, Mr. Horton's son, one of his sons is directly 
under me there, and it is his duty to come on about 2 o^clock 
in the morning to oversee the loading of our wagons ; and I said, 
'^ Chauncey, what is this ? " I says, '' I hear Bordens are out with 
their notice to raise milk the first day of November." He says, 
'^ Yes, and pop has attended to it already." I says, '^ What do 
you mean by that ? " " Well," he says, '^ I got notice and took it 
home to him and got him out of bed this morning," — I am telling 
you very frank so there won't be any misunderstanding — and 
boylike, he blurted it right out. He says, " He didn't lose any 



No. 45.] 2-81 

time. He told Dan to get the printer on the 'phone and give him 
an order for 100,000 notices to get them printed to-da\- so that we 
can get them out to-morrow." That is all there is about that. I 
have read a great deal about it. But that is the facts. Truth 
is mighty and will prevail. 

Yes, I discussed with the members of my company the necessity 
of raising the price of milk before that time. We should not have 
gone up at all if Borden hadn't raised. We would have probably 
stood the gaff and lost money. I am president of the Mutual Aid 
Society, insurance company, to insure our city property, and for 
the last two years it has been their customer, or it has happened 
a number of times, we would meet the same time and same place 
that they w^ould have an exchange meeting. I guess the MiLtual 
always held their meetings in the same room as the Consolidated 
Milk Exchange. I have no recollection of attending a meeting of 
the Consolidated Milk Exchange in September. I have known 
C. H. C. Beakes over 40 vears. I have never discussed the milk 
problem with him. I know Mr. Laemmle. I rarely .-ee him. I 
never discussed with any member of the milk exchange the ad- 
visability of getting the milk dealers together to raise the price 
at the same time. Yes, I know the price was raised from eight 
cents to nine cents on IN^ovember 1st. Accounting for the fact 
that they all raised it the same time, I would say it had got to be 
a grave question — we have to make a living. Where we used to 
have 100 small dealers, there is not one to-day, as I reci-llect it. I 
have been in the business 45 years and that they have been driven 
out by the close competition that there has been in tl\c milk busi- 
ness. Xow, go back 10 or 12 years. The papers hsve a way uf 
getting everything so mixed — I haven't seen a staiement that 
they gave out intelligently describing the situation. We are 
paying the farmers over a cent a quart more than we did 12 years 
ago. We have not raised the price of bottle milk. We are paying 
100 per cent, more for the horses. Eight years ago this winter, 
we bought oats for twenty-eight cents a bushel, and a year ago 
this winter, we paid nothing less than fifty-six cents and from 
that to sixty-five cents, and so it is with everything. We have 
raised our salaries 33 per cent, or 34 per cent. We sell butter, 
cheese, eggs, etc. We have forty-two stores. All food conimotlities 



282 [Senate 

liave increased over 60 per cent, and because we start to increase 
12% per cent. — I cannot understand it. All the necessities of 
life have increased over 50 per cent, 'by Bradstreet's reports. 
Bordens have been filling up on us for ten or tw^elve years. We 
have stood it until it was back-breaking. There had to be some- 
thing done. We could never go through this winter. I don't mean 
to be predicting, but my judgment is that the time of eight-cent 
milk in the winter time in 'New York, as long as we have the re- 
strictions that v/e have to-day and the cost of production and 
everything, is past. I say that after forty-five years in the milk 
business. 

Cheis Yaghts: 

I reside at 4:05A McDonough street, Brooklyn. I am in the 
milk business about 33 years. I have no place of business in the 
city. I ship it to my places in the country. They are at West 
Winfield, Herkimer county; one in Schuyler Junction; one in 
Marcy; one in Adler Creek; one in Denley; one in Deer River* 
one in Sterlingville ; one in Philadelphia, ISTew York. I sell the 
milk that I collect at these various stations to wholesalers in l^ew 
York City. I am a stockholder in the Consolidated Milk Ex- 
change Limited. I had five shares in that and held five in the 
Consolidated. At the time the Milk Exchange Limited was dis- 
solved, they simply transferred the old shares from the old to the 
new. I think it was five years ago. I have been a stockholder in 
the Dairymen Manufacturing Company. I have never been a 
director or officer of the Consolidated Milk Exchange. I think 
I attended one meeting of the stockholders or directors when they 
elected officers in New Jersey. I find out the prices that were 
established by the directors of the 'Consolidated through the '^ Milk 
Reporter." I have been a subscriber for ten years. I receive postal 
cards from them. I get them in the middle of the month. If the 
price changes I buy some of my milk on the exchange price and 
some on Bordens, about half and half. From two places I buy 
ten cents off from Bordens and in one place I pay full Borden 
prices. At those two places the milk is not so good. I do not 
know of any rules or regulations of the Consolidated that binds 
the members to buy at exchange price. I do not know of any pen- 



:N'o. 45.] 283 

alty attached to it. I do not know whether the exchange have 
fixed prices or attempts to ^x prices that should be charged by 
dealers to consumers. At about six of my places I pay the 
exchange prices and three Bordens. When I receive my milk 
from the farmer I cool it off and when it is time to ship I put 
it on the train, and when it gets down to the depot the consumer 
takes it. I do not have anything to do with this end, I ship in 
cans altogether except a few boxes. I ship on the average of 450 
cans of milk per day and abut 30 boxes on an average. I sell to 
twelve or thirteen different dealers. When I sell to the dealers in 
'New York City I charge so much a can above exchange price. 
My agreements with them are oral. The agreement is not always 
made at so much above exchange price. It depends upon what 
we have to pay. I use the Exchange prices as a standard on 
which I base prices when purchasing or selling. I heard that 
prices of bottled milk was advanced from, eight to nine cents on 
ISTovember 1st. I did not know of any agreement with the dealers 
as to the raising of the price. I never was on any committee of 
the Consolidated Milk Exchange. I never produced milk in this 
country. I did in the old country, Germany. The amount that 
I obtained from dealers in ^ew York City above the Exchange 
price averages about fifteen cents per can. I do not belong to 
the Milk Dealers' Protective Association. I do not use the sepa- 
rator in my cream. I make all full cream cheese when I have 
to separate the milk. That is for the surplus milk. 

ClIAELES Yan"hof, Je. : 

I am superintendent of the Eetail Department of the Mutual 
Milk and Cream Company and have been employed in that 
capacity since the middle of August, 1909. I was treasurer and 
secretary prior to that time. For about four or five years. Also 
a director. I was in favor of raising the price from eight cents 
to nine cents for bottled milk on IsTovember 1, 1909. If I said 
at any previous time that I w^ould like to see milk remain at eight 
cents, it was because I was just newly made superintendent and 
my routes and everything were in good condition so as to be able 
to sell more milk off the wagons, and my ambition was to get as 
many customers on one wagon to be served on that route as pos- 



284 [Senate 

sible. I might have said that, but I had no reason to object to 
the President. He ordered me to do it. I know something- about 
an agreement between the Mutual Milk and Cream Co'mpany, 
Sheffields and Bordens to raise the price of milk at that time, and 
never expressed the opinion that I knew that there was such an 
agreement. 

Isaac A. Van Bomee: 

I am in what they call the Milk Department of Sheffield Farms- 
Slawson-Decker Company. I am a director, and have been such 
since 190'2, excepting when I was out of the business for one year. 
I have never been an officer of the company. I would say that I 
have had something to do with fixing a price that my company 
pays to the producers of milk. We generally talk over this matter 
of prices for six months, that is, what we think we can pay in 
diiferent localities, taking into consideration the conditions as 
they exist ; that is, the co-operative creameries, and the butter fac- 
tories which are in opposition to us. I am one of those who decide 
on the prices. I have particular charge of the creamers of the 
country. We only have one creamery at present in which the Con- 
soldiated Milk Exchange price is in vogue. We have Borden in 
competition, I should judge, in more than half of our creameries 
— I should say, 75 per cent, of them. Only twice in our exist- 
ence, have we charged any other price than eight cents per quart, 
for ordinary household milk; that was in 1907 and in 1909, and 
on both of these occasions we raised the price to nine cents. Pre- 
vious to November 1, 1909, we talked over the necessity or ad- 
visability of raising the price of this ordinary milk. We had all 
made up our minds that if we paid our bills through the winter, 
we would have to get nine cents a quart. These conversations took 
place during the months of 'September and October, 1909. We 
didn^t make any effort to talk to or have any communication with 
any other dealers in milk for the purpose of combining with them 
in the raise of price. Concerning the circumstances connected 
with the raising of the price on N^ovember 1st, we had talked it 
over from time to time and we talked of going up the 1st of 
October. As I remember, Mr. Horton and some of our other 
people thought w^e had better do it then, and Mr.. Horton was going 



Ko. 45.] 285 

West, and I went with him, and I think the remark was made that 
we would wait until the conditions out there were looked over with 
ucher dealers to see if we could learn anything in our travel out 
there as to whether we could curtail any expenses wdiereby we 
could cut off anything. This meeting was held in Milwaukee. 
At that time, I didn't have any conversation with him — I didn't 
have any conversation about the contemplated raise in the price. 
The first I knew that my company had raised the price of bottle 
milk was when I arrived at the office on the 28th or 29th of 
October. I was informed at that time that Borden had raised the 
price. I had no idea before that Borden was going to raise. The 
last time I saw Mr. Cochran preceding l^ovember 1, 1909, was at 
Albany. At that time I had no discussion with him about the 
necessity or advisability of raising the price of bottle milk. I 
know all the officers and directors of the Mutual Milk & Cream 
Company. I have no recollection of talking with any of these 
gentlemen previous to !Rovember 1, 1909, in regard to the raise in 
the price of bottle milk to consumers on !N^ovember 1st. I saw 
Mr. Kavanaugh previous to November 1st, I think, the latter 
part of October. I called in there one day in regard to the matter 
of poisoned horses and if I remember right, Mr. Kavanaugh 
brought up the subject and asked me what we were going to charge 
for milk this winter, and couldn't see how it could be sold for 
eight cents, paying the prices that we were. I agreed with him. 
That was all the conversation. 'No agreement was made between 
us in reference to raising the price. I think our notices were not 
brought out until after Borden. The raising in the price of milk 
was a general topic of conversation previous to November 1st. 
Whenever I met any of the members of the Consolidated, that I 
laioAv, we usually talked about the advisability of it. 'We always 
had our eye on Borden to see what the opposition was going to do. 
There was no agreement in reference to raising the price between 
our company and Bordens. The Consolidated Milk Exchange are 
not dealers in milk. They are not in com])etition with us. I never 
attended any meetings of the Consolidated. I was at 6 Harrison 
street, attending a meeting of the Creamery men's Mutual Aid 
Society either in September or October; that is the only time I 
was ever in the Exchange room. The Exchange meeting came on 



286 [Settate 

right after that and I stayed to that meeting. I did not hear them 
discuss the advisability or necessity of advancing the price of 
bottle milk. I presume they were fixing the price of milk, or the 
value, as they call it, at that meeting. I know the value was fixed 
that day probably that I was there, but I can't tell now what it 
was. I never heard of the Milk Dealers' Protective Association; 
I have never been to any meetings. The Sheffield Farms is not 
represented at those meetings to my knowledge. We use separators 
in some of our creameries, but not for the purpose of standard- 
izing milk. We use them for separating cream from the milk 
when we want to sell the cream. We make the skimmed milk into 
caseine, milk sugar and milk powder. We do not make condensed 
milk. Gorman never approached me in reference to the campaign 
of education. 1 think I heard it spoken of before I saw it in the 
newspapers. I heard some one remark what a fakir this fellow 
was. I know Will Sheffield; he is our manager on the Ulster & 
Delaware road. After this investigation started, and at the lime 
the letter was written to Will Sheffield, saying, ^' The market 
seems to have flushed up quite a little in the past few days. Am 
sorry to have seen it, as I would have liked to have seen it keep 
short during this investigation. I do not know what this is going 
to amount to. We have not been called on yet, but expect to be. 
If they will only treat the matter fairly and publish the facts, I 
think it will turn out to be a good thing for the business, as we 
have never been able to get the facts before the people," our com- 
pany was paying some $15,000 or $20,000 more a month to 
farmers that produced our milk than dealers who were in position 
to take advantage of the temporary flush in the market caused by 
the investigation. Our contracts were made six months in advance 
and we had to pay that price; that is what I referred to when I 
said " I was sorry to see the market short during the investiga- 
tion." The flush meant an additional opportunity to the dealer 
who had not fixed the prices, to lower the price to the purchaser. 
In my judgment, I should say that half of the milk which comes 
into 'New York City is sold by the dealers in 40-quart cans and the 
other half in quart bottles. I should say that about 10 per cent, 
of the milk that I bring into New York has been sold as dip milk 
and 90' per cent, sold as bottle milk. The milk which I sell as 



{ 



Ko. -^5.] 287 . 

dip milk is about the same quality as that which I sell in bottles, 
but it will probably not test quite as high; otherwise it is the same 
quality. We sell our highly tested, perfectly pasteurized milk at 
ten cents a bottle. We did not raise the price of dip milk at the 
same time we raised the price of bottle milk. We still hold that 
[at six cents. I think in the summer we sold dip milk for five cents 
a quart. Our salaries were higher this year than in 1908. There 
was also an advance in the cost of delivery with our firm. The 
advance to drivers w^as about $1 a week. 

John p. Wieiick: 

I reside at 908 Bushwick avenue, Brooklyn. I am in the dairy 
business. ' Under the name of a corporation. The name of the 
corporation is the Empire State Dairy Company. jN^ew York cor- 
poration, capital stock $350,000. Organized 1895 or 1896. I am 
president of the company; Charles Keidner, secretary and treas- 
urer. We had a vice-president, I. E. Jordan, but he died in the 
summer. C. H. Wohlers and Cornehlsen are also directors. I 
hold about one-third of the capital stock of the company. There 
are other stockholders but I cannot name them without referring 
to the book. The ofiice of the corporation is 502 Broadway, Brook- 
lyn. We increased our capital stock because we had to have more 
money. We bought up other milk companies. That is eight or 
nine years ago. One of them was the ]Srassau Dairy Company. 
Lately we bought P. G. Bangs Company, about two months ago. 
The rest are small ones, I don't remember the names. We have a 
branch office in 735 Carroll street, and one in Flushing. I have n 
creamery in Huntington county, ISTew Jersey, Pittstown. I have 
one in Susquehanna county. Pa. I have two in Madison county. 
Poolville and Hubbardville. One at East Meredith, Delaware 
county ; three in Sullivan county. Liberty, Stevensville and White 
Sulphur Springs; one in Chenango county; one in Windsor, 
Broome county ; one at Dolgeville ; in Ingham, Herkimer county ; 
in Otsego county at Boomville, and the other at Lacona. That is 
all. I was a member and stockholder of the Old Milk Exchange 
Limited. I don't remember how many shares of stock I bad. T 
own 2 5 shares of stock in the Consolidated Milk Exchange. I 
am a director in the Consolidated Milk Exchange. I became a 



288 [Senate 

director upon the incorporation and have been such with the 
exception of two or three years. I am not an officer or director or 
stockholder in Bordens Condensed Milk Company, ■Sheffi.eld 
Farms-Slawson-Decker Company or the Mutual Milk and Cream 
Company. I am president of the 'New York Dairy Product Com- 
pany with offices at 155 Freeman street, Brooklyn. That is a 
separate company. I have attended meetings of the Consolidated 
Milk Exchange in New Jersey and No. 6 Harrison street. Before 
the Milk Exchange Limited was dissolved we had meetings at 22 
I^orth Moore street. The Consolidated Milk Exchange has never 
dealt in milk, that is, bought and sold milk since its incorporation. 
The object of the Consolidated Milk Exchange, so far as I know, 
is to determine the valuation of milk. The old Milk Exchange 
Limited, we did business and made practice for the business wc? 
did, and a new one is simply revalued, the price of milk from 
time to time, and in the old Milk Exchange Limited 
we fixed the price of milk, using the word price, and in 
price, and in the Consolidated Milk Exchange we used the word 
value; that was the difference. I signed the certificate of incor- 
poration but I don't know the meaning of the words in it, " to 
promote uniformity and certainty in the customs and usages of the 
trade.^' (This answer after strong objections on the part of Mr. 
Ely as to what witness understands that section of the certificate 
of incorporation to mean.) At the meetings of the board of 
directors at which we placed a valuation on milk, different items 
were taken* up, the valuation of milk, cans, and Albany business, 
and what else I don't know, just what all different things. The 
valuations M^ere talked over and then it was voted on. The use of 
the valuation was for me to know the condition of the market. I 
didn't make very much use of this valuation that the Milk Ex- 
change placed on milk. If the farmer wanted to sell to me at that 
valuation I would buy his milk. I don't know how many farmers 
sold to me. I bought about one-third of the milk at that price. I 
bought in all about 1,400 cans and' about one-third of them were 
on the exchange price. I have a written contract Avith the pro- 
ducer. Most for six months, some for a year. Some of the 
farmers we make contracts with mention Bordens or the exchange 
price and state that they will take so much above or so much 



:N"o. 45.] 289 

below, depending upon either Bordens or the exchange price. 
(Contract with patrons of Dolgeville Creamery received in evi- 
dence and marked 4-H.) The Consolidated Milk Exchange have 
no six months price ahead. We simply take the Bordens price as 
some guide. We don't pay exactly Bordens prices there. (Con- 
tract to the patrons of Ingham Mills Creamery received in evi- 
dence and marked Exhibit 4-1.) (Agreement between the pro- 
ducer and the Empire State Dairy Company received in evidence 
and marked Exhibit 4- J.) In which prices for six months are 
stated. (Agreement between the Empire State Dairy Company 
to deliver milk at East Aleredith, X. Y., received in evidence and 
marked Exhibit 4-K.) Prices stated for six months therein. The 
amount that we pay at these creameries is the amount that the 
exchange fixes its valuation for milk. They tack this up on the 
outside of the creamery. Perhaps, we pay exchange prices at five 
of these creameries. One at Springville, one at Pittstown and 
three in Sullivan county. We take it at those five because the 
farmers want the price that is fixed by the exchange. The others 
don't want any standard established of any kind, but want to go 
into the open market and deal with us independently, that is, they 
want a six months' contract ; they want a fixed price for six 
months ahead. That is what they want. I am a subscriber of the 
Milk Reporter. I saw the valuation as fixed by the exchange in 
the Milk Reporter, also by talking with other members. Yes, I 
regarded it as important matter to know the valuation the direc- 
tors of the exchange had placed on milk. Yes, we were particular 
that we know at some time in order to tell what price we ai-e 
paying to the farmers. I know that the newspapers published it. 
T attended all the meetings and this valuation that was arrived at 
l)y the board of directors was really an important matter. I don't 
know whether there w^as any general agreement among the mem- 
bers of the Consolidated Milk Exchange to pay the price tha: was 
ostablished by the board of directors. I don't know whether the 
board of directors of the Consolidated Milk Exchange ever fixed 
the prices to be charged by the dealers to the consumers. They 
did not fix the price the dealers were to charge the consumers 
shortly before November 1, 1909. I never discussed the matter 
10 



290 [Senate 

with any one before tlie raising of price on November 1, 1909. I 
raised the price on bottle milk to the consumer from eight cent? 
to nine cents a quart a few days after JSTovember 1, 1909. We 
couldn't afford to sell at eight cents. I get 12 per cent, or 12^2 
per cent, rebate for sending carload lots of milk. It has been re- 
duced lately from 20 to 12%. I sell bottled milk to stores at 
present at eight cents a quart. I sell about 22,000 bottles of milk a 
day on an average. I sell 400 or 500 cans of dipped milk in a 
day. At the present time I manufacture about 125 cans into 
butter and cheese, and I manufacture because at the present time 
the market is so flushed with milk. The market is usually flushed 
after E^ew Years. It costs us 8,26 cents per bottle from the time 
we take it until we have it delivered. The cost of handling milk 
alone, excluding the purchase price, is 4.02 cents. At the pres- 
ent time the cost of milk is 4.24 cents a quart, the 
express is .05 cents, the cartage from Jersey City is .025 cents, the 
freight is .08 cents, the city delivery is .0162 cents, and the pas- 
teurizing is .045 cents ; and then the wear and tear on horses and 
harness, insurance, rental, depreciation on machinery, clerk, help 
not included in the above figures, or interest on investment. 
(Statement received in evidence and marked Exhibit 4-L.) Some 
of my milk cost five cents a quart, that is bought on butter fat 
test. The premium is paid above the 5 per cent, at only one 
creamery. About one-third of our milk is bottled. The milk we 
sell as dipped milk, I guess we get about six cents a quart from 
dealers. We sell some dipped milk over the counter. We sell it 
for seven cents. I don't think we have one carload a week coming 
in now for which we get the rebate. At the persent time out 
wagons sell on an average of about 200' quarts apiece. It is a 
proper estimate that a wagon must deliver at least 200 bottles a 
day or the dealer will lose money. I am a member of the . 
Creamerymen's Mutual Aid Society. That is an insurance asso- 
ciation and provides for the insurance on the creameries of the 
members of that co-operative partnership. There is also a co- 
operative insurance system which provides for insurance of its 
members upon the horses and wagons that the members oAvn. I 
am a member of both of these societies. One of these is the 
Creamerymen's Mutual and I think the other is the Aid Society. 



'No. 45.] 291 

I am vice-president of the Dairymen's Manufacturing Company. 
I own five shares of the stock and am not able to say how many 
shares my company owms. I was a member of a committee on 
January 21, 1906, to look after legislation in Albany. The ex- 
penses of that committee w^ere paid by the milk .exchange. 
(Minute book introduced show^ing there was a price and sales 
committee reporting on values.) I don^t know whether there was 
a price and sales committee or not. I never heard of a price com- 
mittee. If there is such a resolution there I can't remember how 
it got there. I don't know W'hether a resolution was ever passed 
by the board of directors authorizing or appointing the Milk Re- 
porter the official organization of the Consolidated Milk Exchange 
to publish the prices or values arrived at by the Consolidated Milk 
Exchange. I don't know what became of the minutes of the 
meetings held before January 9, 1906. I never saw^ them. A 
man by the name of Walsh in Bedford avenue collects our cans. I 
don't belong to the Milk Dealers' Protective Association. A man 
by the name of Schaus in New York also collects our cans. We 
pay him so much a can, but Walsh by the year. There is a re- 
quirement of the Board of Health authorities in Brooklyn that re- 
quires us to pasteurize milk. Our milk will not keep any longer 
than any other if you don't take care of it. (A statement pur- 
porting to show the prices per quart paid by Wierck during the 
years 1907, 1908 and 1909 received in evidence and marked 
Exhibit 4-M.) (Statement showdng stockholders of Empire State 
Dairy Company received in evidence and marked Exhibit 4-!^r.) 
Milk reaches the lowest price to the farmer generally in June. 
Some of our cream we put on ice and keep it and sell it at a later 
day, but never keep it longer than a week. About a week, it 
might be a few days more. 

William Alexander Weight : 

I reside at 69 Lefferts Place, Brooklyn. I am in the Finance 
Department here in the city. I was in the milk business for forty 
years previous to August, 1907. In the country I was in the busi- 
ness individually. I had stations in the country, but in the city I 
was in the Syphon Milk Company, a corporation, of which I was 
president. I am a stockholder in the Consolidated Milk ExchangCj 



292 [Senate 

owning thirty shares. I was also a stockholder in the Milk Ex- 
change, Limited, and iDresident . of it. I am not an officer of the 
Consolidated nor a director. I was president of the Consolidated 
for a number of years as w^ell as director. It was the duty of the 
members of the price and sales committee to find out what they 
thought the value of milk. They would try to find out what the 
article was worth, whether the hay crop was good, or anything of 
that sort, and what in their judgment would be a right price to 
pay for milk, and this matter would come up before the board of 
directors and a resolution would be passed by the board of direc- 
tors, stating what, in the judgment of the directors, was the value 
of milk. The milk business was different then than now. We 
used to do a sort of commission business, buying milk from the 
dairies, and I used to use the price which the old exchange fixed 
as a guide in paying for the milk, but after the conditions changed 
and they got creameries and so on, it was not of much use. I am 
interested in the Dairymen^s Manufacturing Company. The Con- 
solidated kept minutes from the year 1895, when it was organ^ 
ized, down to 1906. I have seen that book. I do not know where 
it is now. Mr. Laemmle was the last secretary. He kept the 
minutes. I think we had a stock book and a stock ledger. I pre- 
sume Mr. Laemmle was the custodian of them. I know occasion- 
ally we used to in the exchange of stock or a retransfer of stock, 
lie would have that book in the room and he would bring it for to 
sign ; I would sign checks. Sometimes he would come over to 
my place and have me sign checks, and he would bring the book 
with him. We were supposed to communicate the results of our 
meetings to the members, so that they would know the price or 
value fixed by the resolution of the board. I know some of the 
dairies, the Alex. Campbell Milk Company, the Diamond Dairy. 
etc., knowing that there would be a meeting the last Wednesday 
of the month, would ' call me up and ask, '^ Was there anything 
said about the price to-day, Mr. Wright ? " I would answer, 
'^ Yes," or '' ^o," as the case might be. We never sent out any 
prices. I didn't make a contract based on the price fixed by the 
exchange, but depended on my neighbors. If I was next to :i 
Borden creamery, the farmers insisted upon the Borden price. I 
have paid at the creamery five or six prices. Those that had a 



Xo. 45.] 293 

very good milk I would buy on a butter basis and give them such 
and such figures. If Borden's price was loAver than the exchange 
had been, they would Avant exchange prices. So I think there was 
once or twice when we based it upon what the exchange declared. 
I consider my stock in the Consolidated worth about $2 
a share. It is of no benefit to me. I think the value established 
was of more use to the wholesalers than it was to me. Practi- 
cally, it didn't make any difference to me. I used to he a member 
of the Mutual Aid Society, but I am not at present. I own stock 
in the Dairymen's Manufacturing Company. They manufacture 
milk cans. At a meeting of the Consolidated, nine members con- 
stituted a quorum and the majority of the quorum controlled. I 
would say members of the exchange probably handled about 50 
jDer cent, of all the milk coming into Kew York City. 



* 






APPENDIX. 



MILK SUPPLY OF XEW YORK CITY, WITH RECOM- 
MEXDATIOXS SUBMITTED TO THE MAYOR BY 
THE MILK COMMISSION, MAY 22, 1907. 

The milk supply of Xew York comes from between 30,000 to 
40,000 farms located in six States, some points of shipment being 
400 miles from the city. At these points of shipment the milk 
is commonly delivered to the creameries, where it is mixed, cooled 
and put into receptacles, usually forty-quart cans, from which it 
is transported by railroad to iSew York City. Six years ago the 
Health Department began general surveillance of the milk supply 
with special reference to proper icing ivhile en route, and two 
years ago inspection of the creameries was taken up by the 
Health Department, and to this end the territory supplying milk 
to 'New York was divided into fifteen special districts with one 
inspector assigned to each district. Instructions, recommenda- 
tions and advice are supplied by the Department of Health to 
farmers and the department has up to May 22, 190'7, inspected 
20,000 farms. Eew farmers ship directly to ^N^ew York, but most 
of them deliver it to creameries, at which the milk is mixed, 
strained, cooled and canned, and the 670 creameries now supply- 
ing milk to New York have for the most part been put in good 
sanitary condition. The milk is usually transported in refrige- 
rator cars and kept at a temperature of not more than fifty degrees 
E. In New York the milk is supplied to the public through 
14,107 stores in which the Health Departmen has found that its 
instructions have been substantially carried out. 

The risk of transmitting tuberculosis through milk from cows 
to man is very slight unless the disease in the cow is in advanced 
form or present in the udder. Even this slight risk is considerably 
lessened when such milk is mixed, as it generally is, with that of 
healthy cows before it is sold. We believe that this danger has 
been greatly overestimated in the public mind and that it can best 
be met by systematic inspection and condemnation of cows reveal- 
ing tuberculosis on physical examination. Adequate inspection 
of the sources of infection in the country is essential to protec- 



296 ' [Senate 

tion against tyjDhoid fever, scarlet fever, diphtheria and other dis- 
eases conveyed by employees at the farms and creameries at v^hich 
milk is handled, and the Health Department provides for this 
through its regulating the care and handling of milk. In order 
to have efficient inspection of the milk business at least 100 
inspectors for the country districts from which the supply is 
drawn, in addition to the fifteen now available, should be em- 
ployed. 

Skimmed or separated milk should be allowed under proper 
safeguards. Skimmed milk has a high nutritive value and should 
be cheaper than full milk. The receptacles in which it is sold 
should be plainly labeled ^' skimmed milk." It has been demon- 
strated that the high infant mortality in summer can be materially 
reduced by providing clean milk properly modified and pasteur- 
ized for feeding babies. 

Notwithstanding after all safeguards that may be imposed by 
education and otherwise, there will be cases in which unsafe milk 
will be produced or offered for sale, and all such milk must be 
judged on its merits. The commission, therefore, recommends 
that the Board of Health should, according to circumstances, re- 
quire sufficient sterilization or pasteurization of all milk which it 
finds unsafe for consumption as raw milk, on account of a suspi- 
cion of the presence of tuberculosis or other disease in the cows 
or unsanitary conditions of the dairy or a persistent high bacterial 
content. But in every instance milk so heated should be rapidly 
cooled to at least forty degrees F., and be put, after sterilization 
or pasteurization, into sterilized containers under aseptic precau- 
tions. The pasteurization of milk should be done only a few 
hours before delivery to the consumer, and the container should 
be marked with the time and date of pasteurization and the degree 
and duration of temperature employed for the purpose. 

DR. E. J. LEDERLE, PH. D., 

COMMISSIONER OF HEALTH, CITY OF NEW YORK. 

(In a paper read before the second annual convention of the International 
Milk Dealers' Association, h_eld in Milwaukee, October 18, 1909.) 

It occurred to me that a recital of the ^ew York City condi- 
tions, with which I am the most familiar, would illustrate what is 



IS^o. 45.] 297 

going on in other cities, with such variations as would be incident 
to differences in population and local conditions. 

In the year 1902, the Xew York City Department of Health 
inaugurated a comprehensive investigation into the conditions sur- 
rounding the production, transportation and vending of the milk 
supply. The findings were about the same as is experienced in 
any large city. 

The market milk was, from the sanitary point of view, as a rule, 
in wretchedly bad condition, due to ignorance and lack of care in 
production, which w^as carried on practically without any super- 
vision. Many creameries were found poorly constructed and still 
more poorly managed ; milk was not properly iced during trans- 
portation, bottles and cans were only superficially cleansed, milk 
was often kept in unclean stables in the city, was dipped from cans 
in dusty streets, was kept in stores with unsanitary surroundings 
and often adjoining bedrooms. In fact, milk was produced and 
handled under conditions which tended toward an unclean, un- 
wholesome product. 

The authorities at once set about to improve the supply in all 
directions pointed out, but it was not until several years later that 
it Avas possible to make the comprehensive country inspections at 
dairy farms that are now being so admirably carried out, resulting 
in such marked improvements. 

The State authorities have done practically nothing during the 
last years to improve the sanitary conditions under which market 
milk is produced and transported. They have confined their 
activities mainly to the regulations of adulterations and the super- 
vision of disease among cattle. 

While Xew York City has not the legal authority to make in- 
spections outside of the city limits, the fact that its Health De- 
partment has in force a license, gives indirectly the necessary 
power. A city milk dealer may have his license revoked unless his 
patrons permit inspection and follow out orders for improvement as 
a result of such inspections. The plan is working out well, most 
farmers are gradually complying with instructions, and the more 
intelligent of them are well satisfied with the benefits derived. 
Probably the most serious matter that has come up in this con- 
nection has been the fact that it has been usually not possible for 



298 [Senate 

the farmer to realize an extra compensation for the increased and 
improved plant and additional labor of production We are in 
a transition stage ; all reforms work some hardships. 

The matter of an increase in the price that the farmer must 
receive for his milk when properly produced is one that must 
soon be settled ; it will become more and more urgent. I am not 
unmindful in this coiniection that some dealers are on their own 
initiative paying special prices, but this is as yet by no means the 
universal practice. One of the principal reasons for this is the 
general unwillingness on the part of the public to appreciate the 
value and to pay an additional price for a better milk supply, in 
which position they are unfortunately upheld by the daily press.. 
I am confident that when the improvements are more universal 
and the conditions are thoroughly understood, the public will be 
willing to pay a fair price for wholesome milk of good quality^ 
Some progress has been made in this respect in the introduction 
of the certified, inspected, and scientifically pasteurized grades of 
milk. 

When those interested in reducing the very high death rate of 
infants in our city found what is probably true of every large 
city in the world, that the general milk supply, the market milk, 
was unfit for use for feeding babies, and agitation of reform was 
begun which is bearing good fruit, but we are yet in the state of 
a mere beginning, the surface has only been slightly scratched. 

As in all great movements of reform, there is no agreement as 
to the methods to be employed. Without at this time going into 
details with which you are all familiar, it may be said that there 
was quite a general agreement as to what the unsatisfactory con- 
dition of cur milk supply was, and to what it was due, but there 
were wide differences of opinion as to the best remedial methods. 

At the time of the investigation there were the following grades 
of milk on the !New York market : 

Certified milk (Milk Commission), sold in bottles at from 
twelve to fifteen cents per quart, probably less than 1 per cent, of 
the supply. Bacteria standard of not over 30,000 per c. c. 

Bottled milk, special milk, and so-called baby milk. Highest 
price, nine cents per bottle ; no bacteria standard ; usually 4 per 
cent, to 5 per cent. fat. 



No. 45.] 299 

Bottled milk. Ordinary market milk of good grade; from 3^ 
per cent, to 4 per cent, fat; no bacteria standard; bacteria 
usually very high. Price, eight cents. 

Bottled milk. Selling at seven cents a quart; about 3.25 per 
cent, fat ; very high in bacteria. 

So-called loose milk. Brought to the city in forty-quart cans 
and retailing from four to seven cents a quart; ranging from 3 
per cent, to 4 per cent, in fat, with bacteria in variable numbers, 
usually very high. 

Modified milk and pasteurized milk could also be obtained at 
certain stations, maintained bv Mr. Nathan Strauss for infant 
feeding. 

I am one among those who at that time strongly urged pas- 
teurization, and briefly for the following reasons : 

The dealer was being held strictly responsible for the product 
he sold. In the cases of larger ones, their business had grown to 
such proportions that anything like strict supervision or control 
of the production was out of the question. While some have 
exercised such control quite thoroughly for years others have 
growm up without it, apparently with sanctions of the authorities, 
at any rate without interference on their part. 

Milk supplies of large cities cannot be shut off w^hile experi- 
ments are being made as to the best methods of improvement. 
1 was aware that tuberculosis was very common among dairy 
herds ; that it was recognized there was some danger of infection 
from this source; that the practical elimination of this disease 
from the herds could not be accomplished in many years, and that 
practically nothing was being done in that direction by the au- 
thorities. The excellent system of inspection of the farms, while 
very valuable, could, in my opinion, not for a long time, if ever, 
be so thorough as to eliminate danger from transmission of 
typhoid fever, scarlet fever and diphtheria from milk. 

It seemed that the conditions warranted safeguarding by treat- 
ment where original purity was unattainable. 

At the same time attention was called to the necessity of correct- 
ing the evils at the point of production. 

Our city was now aroused over the milk question, and a bitter 
controversy was waged between two factions as to the best means 



300 [Senate 

of securing safe milk, some maintaining tliat the best and only 
solution was the production of clean, raw milk, as typified by cer- 
tified milk, and others claiming that the remedy must be more 
immediate one than is possible by clean, raw milk production — 
that is, that pasteurization must be resorted to. Much has been 
'produced by very able writers on the subjects of clean, raw milk 
and pasteurized milk, and I could probably add nothing new, but 
I will state briefly what I believe to be the principles involved and 
the stand which in my opinion the dealers should take, both from 
the viewpoint of the public health and in their personal interests, 
which are in this case identical. 

The duty of the milk dealer is to me clear. It is to supply the 
quality of milk which is approved by those disinterested physi- 
cians and sanitarians who have made a special study of the re- 
quirements of infants and invalids and who are familiar with 
public health problems in their broadest application. 

In the present light of knowledge on the subjejct, it would 
apear that a dealer should not be satisfied to offer the public any 
milk unless it be clean and safe, either a clean, high-grade market 
milk, scientifically pasteurized, or a clean, raw milk of low bac- 
teria count from healthy animals. 

PUKE MILK AI^D PASTEUEIZED MILK. 

During the last few years the public has been thoroughly ad- 
vised on all matters pertaining to clean milk and pasteurized 
milk. Every one recognized the necessity of clean milk, but more 
and more are won over to see the absolute necessity, under the 
present conditions in large cities, of pasteurization. All admit 
that the ideal milk is that from healthy animals produced under 
strictly cleanly conditions and properly transported and rendered 
in clean, sealed packages; also that it is impossible to obtain such 
milk generally now, and that it will be for a long time to come. 

It had been scientifically demonstrated that the heating of milk 
to a temperature of 145 to 150 degrees for thirty minutes (pas- 
teurization) will kill all the ordinary disease germs which may 
occur in milk and most of the other germs that are considered 
harmless, but which cause deterioration and entail financial loss. 
As only a very slight deterioration, if any, is effected by such 



No. 45.] 301 

treatment (it is claimed by some that the milk is slightly less 
digestible), there is no good reason why pasteurization should not 
be generally applied and even required for all milk not otherwise 
known to be absolutely safe. I think the most serious objection 
to the general introduction of pasteurization is that it is possible 
for selfish dealers to treat otherwise unmarketable milk and make 
it saleable. This can and should be overcome by strict regula- 
tions, and the conscientious dealer will strive to improve his 
supply just as rigidly in the case of the milk which is to be pas- 
teurized as that which is offered raw. The movement for clean 
milk must not be retarded by the introduction of pasteurization. 

Under existing conditions no large dealer, to my mind, can 
afford to supply milk in large cities unless it is either of the cer- 
tified tyjDC, guaranteed or inspected, or scientifically pasteurized. 
New conditions are forcing great changes in the character of con- 
ducting a large milk business. 

These conditions make for concentration, a gradual absorption 
of the small and often incompetent men into larger concerns and 
will bring about what the press is pleased to term the '^ milk 
trust.'' 

It is an evolution that we see going on about us in every line 
of business. In the milk business my observation is that it is 
working out to the great benefit of the public. It is not con- 
ceivable that there can ever 'be any danger of a harmful combina- 
tion among producers of milk. What then will be the require- 
ments of our future milk supplies of large cities from a sanitary 
standpoint? 

Milk production, transportation and distribution will be under 
strict control, federal, state and municipal. 

Every farm producing milk for sale will operate under a 
permit. This will place the production of milk intended for use 
in condenseries, butter and cheese factories, under the same con- 
trol as market milk, thus preserving the economic balance which 
under the present conditions is uncontrolled, and operates as a 
very unjust and disturbing factor in the milk business. 

All milk should be bought at creameries on the butter fat 
test, this being the only fair means to both parties to determine 
its value, thereby encouraging the production of best grades. The 



302 [Senate 

creamery should be obliged to standardize its milk, thereby being 
able to sell milk on its merits. The milk should be brought to 
the city in sealed containers in refrigerator cars. All dipping of 
milk should be forbidden ; where milk is permitted to be drawn in 
stores, it must be from sealed containers from some form of spigot 
and delivered to the consumer in single service packages. Milk 
made from the above grades should be carefully pasteurized so as 
to avoid disease germs. All cream should be pasteurized and sold 
on the butter fat basis. Milk even from untested herds may be 
permitted to be sold when properly pasteurized. 

A very necessary corollary to make these new conditions 
^economically successful, and otherwise they can have no per- 
manency, is that the public must be educated to the appreciation 
of their value. It will inevitably result in higher prices paid to 
the farmer and a general advance in the cost of milk to the public, 
but it will also mean fewer deaths among babies, healthier and 
stronger children and practical elimination of danger of the 
spread of tuberculosis, typhoid fever, and scarlet fever through 
milk, achievements all worthy of every one's best efforts. 

COUNTRY MILK AND DAIRY INSPECTION BY THE 
DEPARTMENT OF HEALTH, CITY OF NEW YORK. 

There are fifty-seven insjDectors of foods (milk) detailed to the 
inspection of the milk supply of New York City. Two of these 
inspectors, designated as supervising inspectors, are detailed to 
have charge of the country and city division, respectively. 

Country milk inspection covers the production and transporta- 
tion of all milk sent to the New York market. Thirty-three 
inspectors of foods (milk) are detailed to the inspection of dairies 
and creameries shipping milk, cream, or condensed milk to this 
city. One of these inspectors is in charge. 

The milk supply, consisting of 1,650,000 quarts of milk daily, is 
supplied from about 44,000 farms delivering milk to 1,100 cream- 
eries located in parts of Vermont, Massachusetts, Connecticut, 
New^ York, Pennsylvania, New^ Jersey, there being one place in 
Ohio, and two in Maryland. This work further includes the 
supervision of all local dairies, and the investigation of every case 



Xo. 45.] 303 

of typhoid fever, scarlet fever, diphtheria, or tuberculosis occur- 
ring oil a dairy producing milk for this city. 

The •' milk area '' is divided into five districts. Inspectors 
known as district supervisors are placed in charge of these dis- 
tricts, supervising the work of five or six men under them. 

Routine work consists in inspecting the creamery, and reporting 
all unsanitary conditions found. The city dealer operating the 
creamery is notified of the unsanitary conditions existing there, 
and a reasonable time is given to make the necessary improve- 
ments. The inspector then inspects in regular order the dairies 
supplying that creamery, usually visiting from eight to ten farms 
a day. 

Where the dairy scores 90 per cent, or better, a certificate to 
that effect is sent to the farmer. 

Where the premises score between 50' per cent, and 65 per cent., 
a letter is sent urging closer compliance with the rules of this de- 
partment governing the production of clean and wholesome milk. 

Where unsanitay conditions are found on the dairy farm, the 
■dairyman is notified of these conditions, and a full list of the 
recommendations of the inspector is enclosed. A reinspection is 
then ordered to be made within thirty days by the district super- 
visor. The operator is also notified so that he may urge upon the 
dairyman the necessity of improving his premises. Usually at 
this reinspection, improvement is found ; if however, the premises 
are still an unsanitary condition, and the milk is being produced 
in violation of the rules and regulations of this department, the 
creamery operator is notified to accept no further milk from the 
dairyman for shipment to this city. If a dairyman refuses to 
allow the inspector to inspect his premises, the creamery operator 
is notified, and, as in the case of an unsanitary condition, milk is 
not accepted until inspection is made. 

Whenever a water supply is found in use on a farm that is 
aparently contaminated or not free from suspicion, a sample of 
that water is taken for shipment to the Laboratory of the Depart- 
ment of Health for analysis. If it is found to be contaminated, 
the dair-vinan is immediately notified to either discontinue that 
supply of water or boil it before using, and a new and uncon- 
taminated supply of water must be secured within a very limited 



304 [Senate 

tiine, or the creamery operator will be notified to discontiniie the 
acceptance of such milk. 

In making a creamery inspection, the inspector makes special 
note as to whether the infectious disease reports are being properly 
filed by every dairyman drawing milk thereto. Wherever any of 
the following infectious diseases are reported on a dairy farm — 
typhoid fever, scarlet fever, diphtheria, or tuberculosis, an inspec- 
tor is sent to make a careful investigation and secure a full history 
of the case, and it is upon his report that milk is continued to be 
accepted for shipment. 

Dairies scoring above the average, the cows in which herds have 
no clinical symptoms of tuberculosis or other disease and whose 
milk having a minimum bacterial content of GO, 000 germs per 
c. c. in winter, and not more than 100, 0*00 germs per c. c. in 
summer, may secure a permit to sell what is know^n as " selected 
milk." 

Dairies having perfect equipment in the way of concrete 
stables, and dairy house, having only cows in the herd which have 
successfully passed the tuberculin test, and who are producing 
milk containing not more than 30,000 germs per c. c. may secure 
a certificate to produce " guaranteed milk.'^ 

Inspectors make a complete report daily of the number and 
character of inspections made ; also the time they commenced 
work, the time of each inspection, and the time they finished work 
for the day, making a total of the hours on duty. 

The local dairies, numbering approximately 145, locate in the 
four outlying boroughs and the territory immediately adjacent 
thereto, supplying daily over 36,417 quarts of milk, are inspected 
by one man who devotes his entire time to visits among these 
dairymen. 

During the year 1909, 51,116 dairies were inspected, 2,348 
creameries, and 170 water samples were taken. During the first 
three weeks of this year (1910) 2,347 dairy inspections were 
made, 228 creamery inspections; 140 milk samples were taken 
for chemical analysis, and three water samples. 

For the inspection of milk within the city, twenty-two inspec- 
tors are assigned, with one in charge. The field covered by this 
branch of the inspection service includes examining and testing 



:N'o. 45.J 305 

the quality of tlie milk as offered for sale, taking samples and 
delivering same to the laboratories for chemical analysis and bac- 
teriological examination; appearing in court as witness during 
prosecutions for the sale of adulterated milk; sanitary inspection 
of premises holding or applying for permits to sell milk; investi- 
gating source of domestic supply in reported cases of typhoid 
fever; testing temperature of milk as brought into the city, and 
as offered for sale in stores or on wagons. 

During 1909, 115,250 inspections were made in the city, 11,611 
samples of milk were taken, resulting in 870 prosecutions with 
fines amounting to $8,380. 

DEPARTMENT OF HEALTH, 

City of Chicago. 

Mr. L. Hokton, 524 West 57th Street, :N'ew York City. 

Dear Mr. Horton. — The Atlantic City session of the Milk 
Commissions was held on Monday morning, afternoon and even- 
ing. Monday afternoon a very valuable paper on pasteurization 
of market milk was read by Dr. Joseph Evans of Philadelphia. 
There was an extended discussion of pasteurized milk at that 
time, in which I participated. Dr. Darlington was not present. 
I did not go to the night meeting, but I understood that at the 
night meeting Dr. Darlington told of some pasteurizers which, 
running uncontrolled, had given a product that was far from per- 
fect. 

All the discussion in the afternoon was in favor of pasteuriza- 
tion, and I believe that I talked for it more strongly than any man 
who was present in the room. 

It is my judgment that control is necessary with all kinds of 
milk. That, properly controlled, the town cow furnishes the con- 
sumer with the highest grade of milk; second comes certified 
milk; third pasteurized milk, and fourth raw milk. Control 
cannot be relinquished from any one of the four. It is just as 
necessary for pasteuried milk as for any other kind of milk, but, 
properly controlled, pasteuried milk gives a supply so infinitely 
preferable to market milk as that in my judgment to permit milk 
to be sold when pasteurized milk can be had is almost, if not 
quite, a crime. 



306 [Senate 

Proper pasteurization will control typhoid, diphtheria, tuber- 
culosis and diarrhoea, in so far as they spread by milk, and 
against it I cannot see any disadvantage that is other than trivial 
and academic. 

I am for pasteurized milk with every unit of energy which I 
possess and my conscience will not allow me to take any other 
position. 

Yours very truly, 

W. A. EYA^^S, 

Commissioner of Health. 

FROM A EEPORT TO MR. LOTO:Nr HORTON BY A'N 
EMI^STEIN^T AUTHORITY 01^ MILK SUPPLY A^^D 
MILK CONTROL IN^ BERLIIsT. 

Berlin with a population, including the suburbs, of two and 
one-half million, uses 266,667,580 quarts of milk per year, or 
730,596 quarts per day. Some is produced in the city stables, 
but the greater part is brought to the city by local dealers and 
sent from the country either by railroad or driven to the city in 
wagons. Most of the milk is sold from wagons. Milk is usually 
short in September and Ocd:.ober. The average price to the farmer 
including freight is from three cents to three and one-third cents 
per quart — selling price four and one-half cents to five cents 
per quart. Special prices are obtained for special kinds of milk. 
Children's milk from eight cents to fifteen cents per quart. 
During the last three years distant creameries have been sending 
to the city large quantities of pasteurized milk. Cream is sold 
to the jobber at the rate of three-fourths of a cent to seven-eighths 
of a cent for each per cent, fat per quart. 

For some years there has been a so-called milk war going on 
in the city on account of the consolidation of some of the largest 
dealers forming a so-called Zentral for handliug of milk. The 
Zentral could not pay the promised price to the ])roducer of 
three and three-eighth cents per quart free in Berlin, but deducted 
three-eighths cent, and the position of the producer was not im- 
proved. In 1902 the Zentral lost about $100,000. In 1903 they 
made a small profit, after writing off about $20,000. 



:No. 45.] 307 

Long distance transportation charges are much cheaper than 
in this country. The milk is distributed by means of 300 wagons 
and 375 horses. The milk is never dipped from cans but always 
drawn from a spigot. The cans are square so as to take up the 
least amount of room. Each wagon has cans full of skim milk, 
cream of various grades, and buttermilk, each drawn from a 
labelled spigot. The cans are locked, and a contrivance prevents 
in a great measure any separation of cream from the full milk. 
The cans are arranged on each side of the wagon and are inclosed 
and covered so that only the spigot shows. In the rear of the 
wagon is a compartment for cheese, honey, bottled milk, koumyss. 
sterilized milk and butter and for small delivery cans. 

Milk is brought from the dairies in twenty-quart cans, which 
are always locked. There are about 200 collecting points from 
which the milk is brought by train into Berlin. At the dairies it 
is filtered and cooled. At Bolle's place each can is tested, samples 
being taken to the laboratory. The milk is run into large storage 
tanks in which are coils through which cold water is run in sum- 
mer. The milk is kept at 1 C. or 34 F., and the milk kept from 
twelve to fifteen hours, if necessary. The milk is filtered and 
pasteurized, and this is done in the cellar as the milk comes from 
the storage tanks. The filtering material is sand which is care- 
fully washed after each using. The milk after filtration is pas- 
teurized. Each pasteurizer holds 8,000 quarts. Milk is heated 
to 65 C. or 149 F. for forty-five minutes by means of steam coils. 

Every cow is subjected to the tuberculin test and the main 
office notified by telegraph whenever a case of infectious disease 
occurs on any farm from which milk is shipped. From 30 per 
cent, to 40 per cent, of the cows have tuberculosis. The largest 
part of the supply of milk is sold as whole milk and always sold 
on a butter fat basis. There is no law against skim milk in Berlin. 
Bolle inspects dairies through his own representatives in the coun- 
try who supply milk systematically for chemical and bacteriologi- 
cal tests. 



308 [Senate 

Prices of Milk. 
Children s Milk. 

Bottled, delivered, not pasteurized ISVii^'. per quart. 

From selected dairies, cooled in transit, veter- 
inary control, dry feeding 10c. 

Whole 'milk. 
From selected dairies, veterinary control, at 

least 3 per cent, butter fat 4V2e 



U ii 



a a 



u iC 



(C u 



Skim Milk. 
Delivered 2y2C. " " 

Buttermilk. 
Delivered 3c. " " 

Whipping Cream. 
28 per cent, to 30 per cent, fat 50c. 

Sterilized Milk. 
% L 7%c. 

Butter. 
Unsalted, from pasteurized cream 50c. per pound. 

Wages. 

Single man, including board and lodging. ... $7.50 per month. 
Married men, without board and lodging. ... 5.25 per week. 
Drivers (and a commission on sales) 6.00 per week. 

MILK CUKE ESTABLISHMENT AT VICTOKIA PAEK, 
BERLII^.— FKIEDLICH GELB, PKOPKIETOR. 

This place was established in 1888 to furnish exclusively special 
milk for invalids and children. 

The cows are kept in the city and every care taken to produce 
the highest grade of milk. The cows are not tested by tuberculin 
test, which they do not believe in, but by bacteriological examina- 
tion of the sputum. All cows are bought just after calving, and 
are stall-fed and. milked almost dry, when they are sold for beef. 
They are taken to one slaughter house and careful examination 



Ko. 45.] 309 

made of tlie organs of each cow killed, which is a check on their 
method of control. The cows cost $140 a piece and are sold at a 
loss of about $40. Great care is taken in filtering and cooling of 
the milk and arrangements are made with the Bureau of Agri- 
culture to make all necessary chemical and bacteriological tests. 

Prices of Milk. 

Whole milk 15c. per quart. 

Pasteurized milk 7V2C. per quart. 

TUBEECULOSIS REPORT BY UA^ITED STATES DE- 
PARTMENT OF AGRICULTURE. 

Bureau of Ai^imal Iis^bhstry — Bulletin No. 99, Issued 

May 11, 1907. 

" Regarding the dairy industry, we know of the following im- 
portant facts (1) that the commonest disease with which cows are 
affected is tuberculosis, and (2) that milk in some form reaches 
practically all persons." 

'^ The inhalation of the tubercle bacilli is losing much of its 
importance in the minds of investigators, and the swallowing of 
tubercle bacilli is gi'adually supplanting it as the true mode of 
infection.^' 

Milk from tuberculous cows supplies the best known and widest 
distribution for tubercle bacilli and the frequency of the presence 
of tubercle bacilli in milk is underestimated. 

PRINCIPLES OF SANITARY AND PUBLIC HEALTH. 

By Dr. Sedgwick. 

Milk is one of the most dangerous vehicles of infectious disease. 
Chapted XI, page 263. 

Physicians and sanitariums regard it in its uncooked condition 
with suspicion. In 1881 Mr. Llart read a paper before Inter- 
national Medical Congress on milk as carrying infectious disease, 
such as Asiatic cholera, typhoid, diphtheria. Infectious diseases 
so far as conveyed by raw milk can be altogether avoided by 
sterilizing milk. 



310 [Senate 

Pasteurization^ 

While the Milk Commission does not believe that pasteurized 
milk is perfect food^ it does believe and has demonstrated most 
conclusively^ that until the time arrives when the production, 
handling, distribution and after-care by the consumer, is univer- 
sally brought up to the standard that is ideal, pasteurized milk is 
an absolute necessity for the infant, v^hose mother is unable tO' 
provide the natural food. 

We pasteurize by heating the milk to a temperature of 170° F. 
and cooling at once to 40° F. By bacteriological tests made 
w^eekly we know that we annihilate all growing bacteria. Our 
method of pasteurization and instantaneous cooling does not give 
milk any cooked taste. Instead it has a sweet, palatable flavor 
which is distinctly agreeable. 'No difference appears between the 
nutritive valueS' of raw and pasteurized milk. From the stand- 
point of safety pasteurized milk has given satisfactory results. 

PAMPHLET OF THE AMOUNT OF TUBERCULOSIS 
GERMS IN MILK AND OTHER DAIRY PRODUCTS 
IN LEIPZIG, GERMANY. 

By Prof. De. A. Ebee, University of Leipzig. 

Ten years of experiments prove that commercial milk contain? 
tuberculosis germs. In the City of Leipzig, Germany, in 1903. 
the daily supply of milk was 91,881 quarts, of which 3,150 
quarts were produced in the city, 50,343 shipped by rail, and 
38,888 quarts were hauled in. Except the milk produced in the 
city all milk was handled by 663 dealers. '^ Such a splitting up 
of the milk business is exceedingly objectionable from a, hygienic 
standpoint, because the sale of the product among smaller dealers 
is done from open vessels." After exhaustive tests we found that 
the danger of buying milk containing tuberculosis germs in Leip- 
zig is not slight according to our views, because out of seventy 
milk dealers 19-27.1 per cent, sold at least once for a certain 
period milk containing tuberculosis germs. Of the large dealers 
27.8 per cent., who supply more than 50 per cent, of the trade, 
delivered milk containing tuberculosis germs, while out of the 
fifty-two smaller dealers 26.9 per cent, had tuberculosis germs in 



I 

I 



No. 45.] 311 

their milk. The percentage of samples containing tuberculosis 
germs in comparison with the total number of samples taken was 
10.5 per cent., namely 22 cases out of 210. 

The highest hygienic authority in Germany, namely the " Kais- 
erlidge Gesundheitsaint in Berlin," just published Bulletin No. 6. 
1907, of which the following is the summary: The results of the 
experiments are of tremendous importance to the hygiene of meat 
and milk, because they show that the infection of human beings 
with the bacilli of " type bovine " is especially a disease of child- 
hood, and that the germs get into the system through the intestinal 
tract. There can be no doubt that the bacilli (type bovine) can 
develop a generalized tuberculosis in human beings. The infec- 
tion with bacilli (type bovine) has to be traced to foods coming 
from tuberculosis cows, especially milk. 

UNITED STATES DEPARTMENT OF AGRICULTURE. 

Bureau of Animal Ijvtdustry — Cieculae No. Ill, Issued 

June 22, 1907. 

The Commissioners of the District of Columbia appointed a 
committee or conference composed of scientists, physicians, veter- 
inarians, milk producers and dealers, attorneys, and business men 
to consider and report upon the local milk supply and to suggest 
legislation to that end. Those engaged in the industry regarded 
the investigation as a " meddlesome interference with the trade.'' 
Milk is a vehicle of the germs of tuberculosis, typhoid fever, 
cholera infantum, scarlet fever, and other infectious diseases. 

It has been shown by the most painstaking investigations, ex- 
tending over a long period of years, that certain diseases in the 
animal are communicable through the me^lium of the milk, this 
being especially true of tuberculosis, foot-and-mouth disease, 
anthrax, and cowpox; and that diseases like garget, gastro-enter- 
itis, and septic fevers in the cow will render the milk morbific 
to man. 

It has been shown that animals which have fed on jwisonous 
forage plants or have been treated with strong medicaments are 
disqualified from producing a pure or sound milk. 

During the past twenty-five years there have been published 
in the different m.edical journals the histories of 195 epidemics 



312 [Senate 

of typhoid fever, 99 of scarlet fever, and 36 of diphtheria, all 
traceable to the milk supply. 

In the recent exhaustive investigation conducted by the highest 
health authority in this country, viz., the United States • Bureau 
of Public Plealth and Marine-Hospital S'ervice, the Commission 
definitely traced 85 of the 866 cases of typhoid fever (about 10 
per cent.) in the District of Columbia to the use of infected milk. 

It has been shown in a former report tliat in the District of 
Columbia about one-fourth, and in the country at large about 
one-sixth, of all the children born perish before the completion of 
the first year ; that nearly one-half of the deaths in children under 
one year of age are caused by gastro-enteric diseases, chiefly in- 
fantile diarrhea ; and that of the 54,047 infantile deaths which 
have been investigated at home and abroad with reference to feed- 
ing, 86.6 per cent, had been artificially fed, all of which points 
with more than mere suspicion to the fact the morbific agent is 
introduced into the body with the food (cow's milk). 

The committee on certified milk and the committee on sanitary 
relations of the milk supply have both emphasized the importance 
of cooling milk and keeping it at the temperature below 50° F., 
except as may be necessary in the process of pasteurization or 
sterilization, until the milk is delivered to the consumer. The 
reason for this is that the milk when it leaves the udder contains 
very few germs; the majority gain access during handling, 
especially when the milking is done in a dusty stable, or from 
excremeutitious matter adherins^ to the teats and udder of the 
animal. These germs multiply with astonishing rapidity when- 
ever the temperature of the milk is above 50° F., and if disease 
germs are present their proliferation augments, the chances of 
infection. A temperature of 58° or 60° F. will not subserve the 
interests of public health. So, for example, ^' Petruschky has 
shown that at a room temperature a streptococcal content of 300 
per cubic centimeter may increase in twenty-four hours to one of 
10,0i0'0,00i0; but the same milk kept at 50'° F. yielded but 
30,000, or about one thousand as many." (Harrington.) 

Von Freudenreich (Daily Bacteriology, London, 1895) exposed 
a sample of milk containing 153,000 bacteria per cubic inch to a 
temperature of 59° F. One hour after it contained 539,750 bac- 



Xo. 45.] 313 

« 

teria per cubic indh; two hours after, 616,250; four hours after. 
680,000; seven hours after, 1,020,000; nine hours, 2,400,000; 
twenty-hve hours after, 85,000,000. 

The public needs proper education that clean milk is a necessity 
and that infants' sickness and funerals can be reduced at least 
40 per cent. It costs more to produce clean and wholesome milk 
and the consumer ivill have to pay at least a portion of it. " Cer- 
tified milk is reasonably safe, but this is no guaranty that it may 
not occasionally contain germs of disease, and those who desire to 
guard against this slight risk should pasteurize it in the home." 
The committee in the interests of public health strongly advocates 
clarification and pasteurization of all milk. '^ This, to be sure 
will not make bad milk good, but it will at least destroy its power 
to transmit disease germs. ^' Pasteurizing plants under the super- 
vision of the Health Department should be established. '^ Milk 
should never be sold by grocery stores or milk shops unless it has 
been delivered to such establishments in original sealed bottles, 
and then only when there is provision for maintaining the milk 
at a temperature of 50° F. 

The Director of the Hygienic Laboratory of the United States 
Bureau of Public Health and Marine-Hospital Service, Bulletin 
'No. 42, unhesitatingly recommends compulsory pasteurization of 
all milk not certified under class 1 or class 2 of Doctor Melvin's 
classification. The classification referred to is as follows: Class 1. 
certified milk for infants, as hereinbefore described. Class 2. 
clean raw milk from healthy cows, as determined by the tuber- 
culin test and veterinary physical examination; the cow^s to be 
housed, fed, and milked under good conditions, but not necessarily 
equal to the conditions provided for class 1 ; pure water, as de- 
termined by chemical and bacteriological examination, to be pro- 
vided; the bacteriological count of the milk not to exceed 100,000 
bacteria per cubic centimeter, at the time the milk reaches the 
city, at any season of the year, as determined b}^ the Board of 
Health Department at frequent intervals; milk to be delivered to 
the customer in sterilized containers to be filled upon the dairy 
farm, and the temperature of the milk not to exceed 50° F. 
until delivered to the consumer. 



314 ^ [Senate 

THE TEEMAL DEATH POINTS OF PATHOaENIC 
MICRO-ORGANISMS IN MILK. 

By Milton J. Rosenau. 

(Surgeon and Director Hygienic Laboratory U. S. Public Health and Marine- 
Hospital Service. Hygienic Laboratory Bulletin No. 42. January, 1908.) 

The temperature at which milk should be pasteurized hinges 
on the thermal death points of the pathogenic micro-organisms 
which contaminate it. The pathogenic micro-organisms most fre- 
quently found in market milk are those causing tuberculosis, 
typhoid fever, diphtheria, scarlet fever, dysentery, and Malta 
fever. Fortunately none of the organisms causing the above- 
mentioned diseases has resisting spores. Moderate degrees of 
heat are, therefore, sufficient to render milk safe so far as these 
dangers are concerned. Although it would appear to be a com- 
paratively simple matter to determine precisely the temperature 
at which micro-organisms die, such work is in fact surrounded by 
many difficulties and pitfalls; different investigators have come 
to widely different results. Some of these discrepancies are only 
apparent and may be explained by the relation of time to tem- 
perature. The longer the time of exposure, the lower the tem- 
perature necessary to kill any organism. Differences in methods 
are also responsible for differences in results. 

It is difficult to determine precisely at what moment or at what 
temperature a micro-organism dies. The fact that a micro-organ- 
ism will not grow upon artificial media is not always a sure sign 
that it is dead; but with the exception of the tubercle bacillus it 
is safe to assume that ordinarily bacteria that fail to vegetate upon 
suitable media under favorable conditions have at least lost their 
virulence and power to infect, especially when ingested by the 
mouth. 

We know, however, that the vegetability of micro-organisms 
in vitro does not always correspond to their ability to grow in 
the animal host. This is especially true of the tubercle bacillus. 
On account of the reluctance with which this bacillus grows upon 
culture media, it is necessary to resort to animal inoculations in 



Iso. 45.] 315 

order to determine its thermal death point. It is proper to assume 
that the tubercle bacilli in milk which are so attenuated as to he 
unable to cause tuberculosis when injected into the peritoneal 
cavity of a young guinea pig would be harmless when ingested 
by man. 

In these experiments upon the guinea pig it is important to 
differentiate the lesions produced by dead tubercle bacilli, which 
closely simulate those caused by the live tubercle bacilli. In 
doubtful cases it is necessary to inoculate the products of the 
lesions into another animal to determine the presence or absence 
of living micro-organisms. 

The cultural experiments upon thermal death points are sur- 
rounded by many sources of errors and numerous pitfalls, all of 
which must be avoided. 

My experiments Avere designed to imitate the conditions of 
practical pasteurization. The micro-organisms were heated in 
open test tubes and the temperature and other factors accurately 
controlled. Scum formation was disregarded, as it was my inten- 
tion to reach results that might be applied with confidence in 
practical pasteurization on a large scale against natural difficul- 
ties. 

My results of nine series of tests upon guinea pigs with five 
cultures plainly show that in milk the tubercle bacillus loses its 
virulence and infective power when heated at 60° C. for twenty 
minutes ; in other words, it may be considered dead. When heated 
to 65° C. as much time is necessary. 

It should be remembered that the milk in these tests was very 
heavily infected with virulent cultures, indicated by the prompt 
death of the control animals. Milk practically never contains such 
an enormous amount of infection under natural conditions. It 
is justifiable, therefore, to assume that if 6'0° C. for twenty 
minutes is sufficient to destroy the infectiousness of such milk 
when injected into the peritoneal cavity of a guinea pig, and ordi- 
nary market milk after such treatment Avould be safe for human 
use by the mouth so far as tubercle bacilli are concerned. 

The evidence is plain that milk heated to 60° C. and main- 
tained at that temperature for two minutes will kill the typhoid 
bacillus. The great majority of these organisms are killed by 



316 [Sexate 

the time the temperature reaches 5U° C, and few survive to 
(30^ C. 

The diphtheria bacillus succumbs at comparatively low temper- 
atures. Oftentimes it fails to grow after heating to 55° C. Some 
occasionally survive until the milk reaches 60° 0. 

The cholera vibrio is similar to the diphtheria bacillus so far 
as its thermal death point is concerned. It is usually destroyed 
when the milk reaches 55° C, only once did it survive to 60° C. 
under the conditions of the experiments. 

The dysentery bacillus is somewhat more resistant to heat than 
the typhoid bacillus. It sometimes withstands heating at 60° C. 
for five minutes. All are killed at 60° C. for ten minutes. How- 
ever, the great majority of these micro-organisms are killed by 
the time the milk reaches 60° C. 

,So far as can be judged from the meager eividence at hand, 
60° C. for twenty minutes is more than sufficient to destroy the 
infective principle of Malta fever in milk. 

Milk heated at 60° C. and maintained at that temperature for 
twenty minutes niay, therefore, be considered safe so far as con- 
veying infection with the micro-organisms tested is concerned. 

C. B. LANE, SUPPLEES' ALDEKNEY DAIEY, PHILA- 
DELPHIA, PA. 

At the International Tuberculosis Congress, held in Washing- 
ton, D. C, 1908, it was made clear that tuberculosis in ite rela- 
tion to milk products to dealers and consumers was one of the 
greatest problems before the world to-day and that it must be 
solved at any cost. The weight of evidence indicates that tuber- 
culosis is transmittable from animal to man and that milk from 
tuberculosis cows is dangerous as a food product. 

In leading up to the tuberculosis question I will review briefly 
some of the steps taken in the past to better the quality of milk. 
One of the first efforts was through the establishment of standards 
for fats and solids by various states and some of the larger cities. 
The delivery of milk in bottles was another method to better the 
quality of the milk and was a decided improvement over the old 
'^ dipping " system. Many progressive dealers made an effort to 



JS^o. 45.] 317 

secure a hight fat milk from the better grade of dairies for their 
trade; while this was, of course, limited, it was a feature in im- 
proving the quality of milk. Commercial pasterization was 
another effort to put milk out to the consumer in a better con- 
dition. 

The certified milk movement had for its object the securing 
of an ideal milk supply, and while this was also limited it unques- 
tionably has a great influence in the improvement of market milk 
by placing before the public the highest ideals in milk produc- 
tion. This was followed in many of the large cities by the estab- 
lishment of infant milk depots, the object of which was to place 
a pure, clean, safe milk within the reach of the infants. Statistics 
show that this work has reduced the death rate verv m-eatlv, in 
some instances it has been reported as high as 50 per cent. 

The application of the tuberculin test to any herd properly 
controlled for a period of five years will eliminate all diseased 
cows and will avoid any expense fur loss after that time. It will 
cost the public one cent per quart during that period. 

DR. E. C. SCHROEDER OF THE BUREAU OF AXIMAL 
INDUSTRY, WASHI]srGTO]N^, D. C. 

'^ If the public was informed of the dangers, among which 
tuberculosis is one of the many, to which it is exposed through 
the use of impure, dirty and infected milk, the demand for milk 
of approved purity would rise to the magnitude of a concerted 
national movement.''^ 

Farmers when fully advised cheerfully co-operate. 

Pasteurization of milk in the city does not j^revent the spread 
of the disease among the animals in the country. It does not pre- 
vent the forty million dollars annual loss to the animal industry 
in this country. 

DR. H. L. RUSSELL, DEA^^ OF COLLEGE OF AGRICUL- 
TURE, MADISOX, WIS. 

jSTo one claims that the larger portion comes from bovine 
sources, but there is evidence that a certain portion does come 
through this source. We have got to force this question whether 



318 [Senate 

we want to or not. We have a million and a half dairy animals 
in our State and it would require too many inspectors to enforce 
a State law prohihiting the sale of milk coming only from tuber- 
culin tested cows. It will of necessity temporarily increase the 
cost of milk to the consumer. In Denmark at one time 40 per 
cent, of the herds had tuberculosis. Something must be done to 
avoid similar condition here. CoHDperation between all interested 
is necessary to stamp it out. 

B. H. EAWL, CHIEF OF DAIRY DIVISION, BUEEAU OF 
ANIMALS INDUSTRY, WASHINGTON, D. C. 

After securing co-operation between the interested parties, com- 
petent teachers rather than inspectors are essential to represent 
the State among the farmers. The problem of clean milk is one 
that involves the inspector or teacher, the producer and the con- 
sumer. The producer must be taught how to conduct hisi dairy 
in the economical way, so that an exorbitant price will not be 
necessary in order to enable him to make a reasonable profit on it. 
The inspector must be a teacher and the consumer must realize 
the difference in value of the product and must be willing to pay 
a reasonable price for high quality and thus make it possible for 
high quality to be produced profitably. 

DR. a KOEHLER, CHIEF FOOD INSPECTOR, DEPART- 
MENT OF HEALTH, CHICAGO, ILL. 

Pasteurization is highly important, and its missunderstandings 
are based upon the different meanings of the term on account of 
the varying amounts of heat applied and results accomplished. 
It is done for two reasons. Firstly, to enhance the keeping quali- 
ties of the milk. This is accomplished by destroying the lactic 
acid bacteria. Secondly, it is necessary as a means of rendering 
a safe milk supply that could not otherwise be procured in large 
enough quantities to supply our rapidly increasing urban popu- 
lation. In the city of Chicago two epidemics of typhoid fev^r 
were traced directly to the milk supply. In Washington it was 
found that 10 per cent, of the cases of typhoid fever have resulted 
from infection by milk. In a recent thorough investigation of 



Xo. 45.] 319 

milk-born epidemics made by Dr. J. W. Trask and reported in 
Bulletin ^N'o. 41 of the Public Health and Marine Hospital Ser- 
vice, 179 epidemics of typhoid, 51 of scarlet fever and 23 of 
diphtheria were traced directly to the milk supply. The only way 
to practically eliminate the spread of contagious diseases seems to 
be the proper pasteurization of the milk, and through adequate 
control guard against improper pasteurization. Certain bacterial 
standards prove to be essential for pasteurization. 

EXPEEIEKCE OF A LAEGE FAEMER FOE thirty 
YEAES, WHO KEPT AN ACOUEATE ACCOUNT OF 
THE COST OF PEODUCING MILK. 

Ey Alfred Ely. 

(Attorney for Consolidated Milk Exchange.) 

I have taken tbe last six years returns from my farms, with 
respect to which I have kept accurate statistics, and I have aver- 
aged those last six years returns in a variety of ways. 

I have taken four farms for the six years and averaged them. 
I have then taken two separate -farms and averaged them together 
for six years, the conditions on those two farms being almost 
identical in so far as it is possible to have two farms operating 
under the same conditions. 

I have taken one other farm where the conditions were better 
than the two preceding farms and averaged those wp for six years, 
and I have averaged this last farm back, for eleven years. 

I find the price of milk which I have received for those six 
years, averaged up, is as follows, this being the actual price per 
quart actually received by me in cash, the gross receipts being 
divided by the gross number of quarts, so that this result is with- 
out any connection whatever with any posted price or contract 
price, the differences resulting from the fact that more money 
might be made under one price, or more money might be made in 
the winter months than the summer months, or vice versa : 

For four farms averaged for six years, beginning April 1, 1903. 
and ending April 1, 1909, I received .0299 cents per quart; that 
is one-hundredth of a cent less than three cents. My feed during 
those six years averaged up for the four farms was 49 per cent. 



320 [Senate 

of the price received, and my proceeds for cow milking averaged 
for the six years on the four farms was $50.03, after deducting 
the feed bills for mill-feeds. 

Now, during this period and under the same average it took 
1.15 pounds of feed to make one quart of milk, at an average cost 
per quart of $0'.0'141. That is one and four-tenths cents for the 
mill-feed. 

Now^, take two other farms where the conditions are identical 
as far as it is possible for them to be; they lie right together as 
parts of the same tract; for the six years I received .0296 cents 
per quart. The cost of the feed was approximately .368 per cent- 
of the price. The proeeeds per cow milking after deducting the 
feed bills, but making no other deductions, was $54.37 per cow 
milking. 

Now, take one other farm, a farm by itself, not included in the 
foregoing, for the same six-year period, averaged, my actual price 
received was $0.0299 per quart. The feed was 43 per cent, of 
the price. And the receipts per cow milking, after deducting the 
feed bills, was $64.98. 

Now, take the same farm for 11 years, beginning w4th April 1. 
1898, and ending April 1, 1909, my price received was $0.0272 
per quart. My average feed was .418 per cent.' of the price re- 
ceived (I am speaking only of my OAvn prices received) and the 
receipts per cow milking, after deducting the feed bills for eleven 
years, was $5 9. 73 per cow milking. It took during those eleven 
years 1.7 pounds of mill-feed, averaged through the year, to make 
a quart of milk, at an average price for the eleven years of 
$0.0114. 

The Refeeee. — You mean ^rain or feed ? 

The Witness. — I mean all feed that is fed, weighed up by 
the pound and averaged for the year. I know what I am feeding ; 
I keep track. That is all the feed that is fed. Mill-feeds. 

Now, the average feed fed during the six years, averaged up 
for all these farms, and under varying conditions, was .421 per 
cent, of the price received for the milk ; slightly over 42 per cent. 
So that is a very close approximation, and in my opinion that is 



:N^o. 45.] 321 

an almost absolutely accurate approximation of the cost of feed 
in producing one quart of milk; 42 per cent of the price received 
is expended in feed. In other words, the price of milk as aver- 
aged being $0.0299 per quart, the cost of feed per quart is 
$0.012588; so there is one cent and about twenty-six one-hun- 
dredths. ^ow, the cost of labor, maintenance of machinery and 
teams and other items of that kind, on the same basis, is .008656 
cents per quart for this period; that leaves a balance of slig'htly 
over eight-tenths of a cent per quart to the farmer is all that is 
left to pay the following items : Taxes, which will average about 
$4 per cow; insurance, all repairs to buildings and plant, all in- 
terest on plant and the investment, and any profit there may be. 

^NTow, in my opinion, there are very few farmers who have 
any such accurate statistics running over a period of years out of 
which it is possible to make any computation of costs, and in m;y 
judgTnent those figures are substantially accurate results. 

The Eefeeee. — Do you figure in there any allowance for ad- 
ministration ? 

The Witness. — I^one whatever ; that is, none whatever for 
myself, nor supervising. 

!N^ow^, I would like to add this: Since 1898 the average price 
of milk to the farmer has been steadily increasing, and taking one 
of my farms for those eleven years, the following are the prices 
w^hich I have actually received for my milk for the year, based 
on (a division of) the gross receipts from the milk divided by the 
actual number of quarts sold; those are all farm year calculations; 
bear in mind that the farmer knows nothing about the calendar 
year, and any attempt to figure upon the calendar year will result 
in errors : 

April 1, 1898, to April 1, 1899, at .021 per quart. 
April 1, 1899, to April 1, 1900, at .0231 per quart. 
April 1, 1900, to April 1, 1901, at .0247 per quart. 
April 1, 1901, to April 1, 190'2, at .0237 per quart. 
April 1, 1902, to April 1, 1903, at .0268 per quart. 
April 1, 1903, to April 1, 1904, at .0257 per quart. 
The average of those six years is .0242 per quart. 
April 1, 1904, to April 1, 1905, at .0257 per quart. 
11 



322 [Sexate 

April 1, 1905, to April 1, 1906, at .0293 per quart. 
April 1, 1906, to April 1, 1907, at .0302 per quart. 
April 1, 1907, to April 1, 1908, at .0346 per quart. 
April 1, 190i8, to April 1, 1909, at .0339 per quart. 
That you see is three and four-tenths cents almost. 

Those were the actual prices which I received doiring those 
jears at this particular farm, which is fairly standard. 

jNTow, during that same period there have been great fluctua- 
tions in the amount of feed required to produce a quart of milk, 
and there have been some fluctuations in the value of the feed in 
comparison with the price, but the cost of feed in 1908 and 1909 
was the highest we have ever known it to be and was 50' per cent, 
of the gross receipts of the price received, so that upon a price 
received of three and four- tenths cents one and seven-tenths cents 
went to feed. We had to pay that year as high as thirty-one and 
thirty-two dollars per ton for feed; and it takes just as many 
pounds of feed to make a quart of milk that year as it did any 
other year. 

ISTow, during that last year my balance per cow milking, after 
deducting my feed bills, was $63.95 per cow, while the preceding 
year, 1907-8, the feed bills were only about 36 per cent, of the 
price and my balance per cow was $100.86 per cow milking. 

Now, as a general result of these figures, and my own experi- 
ences for thirty years, in farming, my observation of my friends 
and neighbors who are around me in all directions, I want to say 
that in my opinion there is no approximate cost for the production 
of milk per quart, but that the cost will vary according to each 
farm and according to each farmer and the conditions under which 
he is operating, and also according to the quantities of milk which 
he makes each month during the year, in my opinion the one 
most important fact with reference to the cost of milk and the 
profit to the farmer is the quality of the cow, with the single 
exception of the number of pounds of feed which it takes to 
make a quart of milk. A ten-quart cow or eleven-quart cow costs 
no more than an eight-quart cow. 

The Referee : 

Costs no more to feed ? 



"No. 4-0.] 323 

The Witness : 

Costs 110 more to produce the milk from one cow than from 
another; it costs no more to produce an average of 11 quarts than 
8 quarts per day, except the cost of the feed. 

The difference between two of my farms which I have given 
you are explained in this way — some of the differences : The 
average cost per cow milking per day for four farms, averages 
for six years, was 8.98 quarts per day per cow milking. Now, 
two of those farms, however, produced an average of 8.28 quarts, 
per cow^ per day only. During the same period one of those farms 
produced 10.63 quarts per day per cow milking, and this same 
last farm for an average of eleven years produced 10.39 quarts 
per day per cow milking during the entire eleven years. That 
difference of t^vo and a half quarts per day makes a diff'erence 
betw^een a profit and no profit. 

I Avould like to say another thing. One of the greatest ele- 
ments of expense — the two great elements of expense to the 
farmers in producing milk are, first, the cost of feed, which has 
more than doubled ; I have bought the same feed at twelve or 
thirteen dollars per ton that I am now paying twenty-nine or 
thirty dollars ; and, second, the item of labor, which has more than 
doubled in the last fifteen or twenty years, in my judgment owing 
very largely to the operations in this country of the protective 
tariff laws which have attracted all the labor possible into the 
manufacturing villages where the profits of business permit the 
payment of higher wages, than it is possible for the farmer upon 
these close margins to compete with. 

The Referee : 

How do vou account for the fact that if labor has doubled, and 
with double the cost price and feed that the farmer is making 
now" more than he did twenty years ago? 

The WitA'ESs: 

The reason is this: We are farming far more intensely. Take 
one of my places I have in mind, I am carrying on an average of 
50 head of stock, and when I began I had great difficult in carry- 
ing 20 or 25, and my gross receipts are double from the same 
farai what they were thirty years ago, twenty-five years ago. 



324 . [Senate N'o. 45.] 

The Kefebee: 

Accounted for by the more intelligent handling of the soil ? 

The Witness : 

Intense farming. I am making milk twelve months of the year, 
and in the old days we made it eight months. 

This is to certify that the foregoing is a synopsis with ap- 
pendix, as prepared by me, of the testimony taken before me in 
the foregoing proceeding. 

Dated, :N^eiW York, March 23, 1910. 

WILLIAM GRA:NT BR0W¥^ 

Referee. 






INDEX. 



SUBJECT. PAGE, 

Organization, etc., of Milk Exchange limited 8 

Exchange 9 

Cost to farmers to produce a quart of milk 10 

During the year 1909 14 

Statement of milk delivered in New York city during the farm years (including 
cream and condensed milk) in cans of forty quarts each (compiled from monthly 
reports by the railroad companies by Alfred Ely, attorney for the Consolidated 

Milk Exchange) , . 31 

Prices paid by dealers to farmers and cost of handling milk from producer to 

consumer 32 

Comparison of Borden and Exchange prices 38 

Price of fluid milk prevailing in various cities of the United States and Canada. . 39 

Statistical report on population, milch cows, etc 42 

Borden's Condensed Milk Compan}'- contract (Exhibit) 43 

Summarized testimony of Marvin Scudder, Accountant 46 

Concise digest of salient points from testimony of milk producers: 

Axtell, Delos 48 

Barber, Osman L 50 

Bauder, Frank W 51 

Blandy, Isaac C 52 

Brown, George M 56 

Brown, Edward J 57 

Comfort, Stewart S 58 

Cook, Herbert E 61 

Eastman, Almon R 64 

Greaves, George H 66 

Howell, Benton 71 

Kay, Will E 73 

Livingston , Benjamin F 74 

Locke, H. La Mott 76 

Mather, William A 80 

Moe, Albert J ^ 81 

Moulten, Charles F ." 82 

Nicoll, Andrew J 84 

Parkinson . Edward K 85 

Petteys, John S 87 

Richardson, William P 88 

Sanford, Edward B 94 

Sanford, Milton L 96 

Stevens, Henry 98 

Strong, William H 100 

[325] 



326 [Senate 

SUBJECT. PAGE 

Concise digest of salient points from testimony of milk producers — Continued. 

Vail, Harry 100 

Wells, AVilliam A 102 

Wikoff, Rufus 102 

Young, Henry 104 

Concise digest of salient points from testimony of milk dealers and creamery 
men: 

Arnstein, Henry 107 

Baker, Robert Bruce 10& 

Beakes, Charles H. C. Ill 

Bennett, William H 125 

Bleier, David 124 

Campbell, Alexander 126 

Campbell, Luther L ^ 136 

Carpenter, Linn E 141 

Chardavoyne, Henry S 144 

Cochran, Mr 146 

Conklin, William B 153 

Decker, Thompson W 159 

Ely, Alfred 160 

Ferris, Joseph A 172 

Gorman, Thomas A 175 

Hale, H. Oscar 179 

Halsey, Benjamin S 182 

Hamilton, Louis A 183 

Harrison, Webb 183 

Helfand, Tone 188 

Herkstroter, Fred H 189 

Horton, David S 190 

Horton, Loton 190 

Huth, Adolph 196 

Ihnken, George 197 

Jetter, John 198 

Johnson, Charles E 199 

Jordan, Joseph V 200 

Kavanaugh, James J 202 

Kehrer, John H 208 

Keogh, John 209 

Laemmle, Joseph 211 

Lawrence, William A 228 

Levy, Samuel 230 

Magoon, Isaac 232 

Marsten, Edgar L 235 

Milbank, Albert J 235 

Milbank, Dunlevy 236 

Milburn, Arthur W 236 

Millett, Stephen C 246 

Miller, Louis J 248 

Mogeluf , Nathan 251 



Xo. 45.1 327 



SUBJECT. PAGE. 

Concise digest of 'salient points from testimony of milk dealers and creamery 
men — Continued. 

Nicholls, George L 254 

Oher, Christian 255 

Paul. John 256 

Posner, Isaac . 257 

Rauch, Henry 258^ 

Rider, James C 261 

Rogers, William E 264 

Rogers, William J 268 

Sanford, Francis B 277 

Silber, Theodore 277 

Taylor, Frederick S 278 

Tuthill, Horace S 278 

Yagts, Chris ; 282 

Yanhof , Charles, Jr 283 

Van Bomel, Isaac A 284 

Wierck, John P 287 

Wright, William Alexander 291 



APPENDIX. 



Milk Supply of New York city, with recommendations submitted to the mayor 

by the milk commission 295 

Dr. E. J. Lederle, Ph. D., commissioner of health, city of New York, in a paper 

read before the second annual convention of the International Milk Dealers 

Association, held in Milwaukee, October 18, 1909 296 

Country milk and dairy inspection by the department of health, citj'^ of New 

York , 302 

Letter on pasteurization from W. A. Evans, commissioner of health of the cit\' 

of Chicago, Illinois 305 

Extracts from a report to Mr. Loton Horton by an eminent authority on milk 

supply and milk control in Berlin 306 

Milk cure establishment at Victoria Park, Berlin 308 

Tuberculosis report by United States Department of Agriculture (Bureau of 

Animal Industry) 309 

Milk as a medium for infectious diseases; pasteurization 309 

Infection of humans by bovine bacilli in Leipzig, German}^ 310 

Milk as a vehicle of germs; committee report on milk in District of Columbia 31 1 

The thermal death points of pathogenic micro-organisms in milk by Milton J. 

Rosenau 314 

Transmission of tuberculosis from animal to man; certified milk and commercial 

pasteurization •. 316 

Inspection of dairies for tuberculosis in cattle 317 

Pasteurization by Dr. G. Koehler, department of health, Chicago, Illinois 318 

Account of the cost of producing milk by a farmer of thirty years' experience 

l_ (compiled by Alfred Ely, attorney for the Consolidated Milk Exchange) 319 

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